Tax Rebate on Private Pension

dreamalive

My Dad has recently taken early retirement and so has decided to draw his private pension.

However, when he started received his pension he found that he had a tax code of BR and he was paying full tax on it when in fact he shouldn't have been paying any. This was because HMRC didn't receive his P45 until after his pension was set up so they thought he was still in employment hence why his pension was being taxed.

HMRC have now sent him a pension enquiry form which he returned two weeks ago but he still hasn't heard anything as yet - should this sort the problem out?

Will HMRC write to his pension place and tell them to alter the tax code? Also, will he get an automatic tax rebate from his pension provider or will he have to wait until this time next year when he gets his P60? This seems an awfully long time for him to wait to get the money he is owed

Thanks for your help

CLAPTON

your father sole income is his pension?
his pension is less than 6475 per annum?
he is younger than 65?

then if he retired after april 6th then once his tax code is changed to 647L then he will automatically get his tax corrected.

If he retired before april then he will need to claim a refund for last year depending upon the circumstances.

If he has saving interest and his total income is less than 6475 then he may wish to opt for this to be paid gross.

dreamalive

Yes, he is under 65 and it is only source of income.

He retired end of February 2009 - so he would have to claim back for the month of March? But the excess tax paid from 5th April should be refunded automatically by his pension place once they alter his tax code - is that right?

fengirl_2

Yes, HMRC will make the refund for 08-09 and his pension provider will make the refund for this year. 2 weeks is a very short time in the world of HMRC nowadays. Expect to wait 6-8 weeks.

dreamalive

Many thanks for that - that's a big help:)