Oversubscribing an ISA is treated as an administrative error rather than a criminal offense [1][2][3]. There are no punitive fines for genuine mistakes, provided you correct them promptly [1][2]. The primary financial penalty is loss of tax-free status: HMRC will instruct your provider to remove excess contributions and any growth earned on that portion [1][2][3]. You must then pay income tax or capital gains tax on the earnings generated by the overpaid amount, as if held in a standard taxable account [1][2]. Any government bonuses paid on invalid subscriptions (such as Lifetime ISA bonuses) must be returned [3]. If you deliberately and repeatedly ignore limits or delay reporting, HMRC may void your entire ISA, resulting in a much larger tax bill [2]. The most significant long-term cost is forfeiture of that year's unused allowance and lost future tax-free growth on the removed funds.