HAVE YOU TAKEN A PENSION LUMP SUM?
• HMRC has overcharged £600m in Pension Tax
• The freedoms were implemented in April 2015 to give savers greater access to their pensions, allowing flexible withdrawals from the age of 55.
• HMRC has refunded a record £166m during the 2019-20 financial year.
What is a Pension Tax Rebate?
When you start taking money from your pension, you can usually take the first 25% of your pension tax-free. The rest of your money will be subject to tax when you take it so you could pay income tax depending on your circumstances.
HMRC guidelines mean that taxable withdrawals from your pension can sometimes be taxed at an emergency rate. This can lead to you paying more tax than you need to.
If you take a regular income from your pension, the tax will usually balance itself out so you don’t overpay. However, if you take lump sums when you need them, emergency tax might apply then. If you pay more tax than you need to, you can reclaim this from HMRC which can take around five to six weeks.
Why are pensions being overtaxed?
Those wanting to access their pension pot can do so in two ways. The first is to take an uncrystallised fund pension lump sum (UFPLS). Each pension withdrawal is 25% tax-free, then the rest is charged at your normal income tax rate.
You can also take a lump sum from a pension drawdown plan. If you do this, 25% of your total pension savings are tax-free and any subsequent withdrawals are subject to income tax. Your pension company collects the tax on your behalf, so the lump sum you get is paid net of tax.
However, many people overpay tax the first time they withdraw from their pension. This is because your provider may not know what your tax code is, or details of your other income if you have any.
WHO CAN CLAIM A PENSION TAX REBATE?
Anyone who was drawn a lump sum from their flexible pension are entitled to claim.
Claim My Tax are a no win, no fee company, so what do you have to lose by checking to see if you are owed a Pension Tax Rebate.
NON RESIDENT PENSION TAX RELIEF
Depending on the country(s) you are living in you might be able to reclaim some or all of the tax you have paid on your UK pension income over the last four years.
A non resident can also be entitled to claim a tax rebate on any pension lump sums received within the last four tax years.
Why Use claim my tax?
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Here at Claim My Tax we recognise that many people worry that using a tax rebate company means uncertainty about what they will pay. We promise that the price we say is the price you pay.
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