ISA deadline

[morg_monster]

Am I right in thinking that unless I have �3000 to invest immediately there is no point in trying to beat the tax deadline and open a mini cash ISA before the deadline April 5th?

[miss_chase]

If you expect that you will want to save the maximum of �3000 next year then you should put in what you can today. Otherwise you don't need to.

Basically, you can put in up to �3000 a year (until 2006? the government decides) but if you take some out you can't replace it. This earns you tax-free interest.

Obviously, like with all savings, the longer its in the more interest you will get... 

[morg_monster]

OK, thanks, so the idea is if I go and open an ISA right now and put �100 in it (say), then as of midnight on the 5th that is the end of my contributions for this tax year. So I would just have �100 protected from the taxman. BUT on April 6th I can start saving towards a new �3000 (into the same ISA I opened before?) so by the end of the next tax year I could have �3100 protected.

Am I right?
Thanks for your help. I've been looking on the net but still just didn't quite understand the benefits of 'beating the deadline'.
I won't be bothering to try now, as I'm a student at the moment so don't need to worry about tax, and in October I'll get a job but doubt I would be able to save the full �3000 from then until the following April.

[Hammer]

Spot on. You can put in up to �3000 in each year. Unless you intend going up to the maximum �3000 next year there is no need to beat the deadline.

[miss_chase]

Yes, that's right.

The myth about students not paying tax isn't quite true though... you get the basic personal allowance like everyone else and then will get taxed like everyone else. Most students however will not earn more than their basic tax allowance (about #4500) hence why most students don't pay tax.

(sorry really hate the 'tax-dodging student' label as i had to pay tax when i was a student given that i worked more hours than i was at uni!!)

[morg_monster]

yeah i know i could in theory pay tax. Actually I am a post-grad student on a tax free studentship which stipulates that I can't do paid work unless I ask permission first (so I don't fail and waste their �10k!). I did get paid about �1000 last summer and my next job is to get the 10% tax I paid on that back.
again, thanks for your help, I am much clearer about everything now.