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HMRC unveils new forms to reclaim tax on pensions

HMRC has unveiled three new forms to allow people to claim back overpaid tax after accessing their pension under the new freedoms.

In a newsletter published today, the Government confirms individuals will be able to use the P50Z, P53Z and P55 forms to reclaim tax if they were placed on emergency tax codes when taking withdrawals from their pension pot.

Previously, if someone without a P45 took a single withdrawal, but left some money in their pot, they would have to wait until the end of the tax year to reclaim. Now, they will be able to use the P55 form to more quickly get a refund from the tax office.

HMRC says people planning to take a series of irregular payments should talk to their pension provider.

It says: “Having applied the temporary rate of tax to the first payment, in some cases the provider might be able to report a zero payment for the months where no withdrawal is made, and work with HMRC to tax subsequent withdrawals and correct the person’s tax position.”

In addition, the P50Z form should be used if individuals flexibly access their entire pension pot and have no other income. People who use up their entire pot but do have other taxable income in the same tax year should use form P53Z.

Talbot & Muir head of technical support Claire Trott says: “I have been talking to many advisers who have been concerned about the possibility of their clients paying too much tax and not being able to reclaim it until the end of the tax year. This has led to considerations such as splitting the payments over a number of months or leaving payments until later in the tax year so the client is out of pocket for a shorter amount of time.

“The introduction of the P55 will mean that although overpayment of tax is still a concern it will be less so because they can advise their client that they will be able to reclaim their tax should they choose to do so.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. I just cannot see why HMRC have this problem. If the pension firm hasn’t got the member’s tax code simply deduct 20% at source. That would meet the liability of most individuals. Moreover the firm has to provide details of every payment to HMRC and the tax man now has the systems to link this to the individual’s tax office

  2. @Trayner John
    I agree with you – its not mastermind is it? (luckily for you if memory serves me correctly?)

  3. Steve Thompson 22nd May 2015 at 10:31 am

    I cannot access the form P55 on my macbook air, no matter how hard I try. I have downloaded the correct software but no joy. I have also informed HMRC but to to no avail
    Can you help with sending me the correct form please (steve@ud2.co.uk)

  4. Must agree with the above 2 comments. HMRC make everything difficult and some commonsense would be useful. Still trying to obtain Form P55 even with latest Adobe Reader. Why deduct too much tax from standard rate taxpayers. Please HMRC .after the the multi nationals

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