Policy of over taxing

prog

My wife recently cashed in all of her personal pension which totalled less than £18,000.
The rules as we were informed are that the first 25% is tax free and the remainder is subject to tax.
Despite the tax office having all my wifes income details and tax code used for some considerable time, they told the pension company to tax the residue at 30%.
I understand that she can claim back this over taxed sum, which in our circumstances is a considerable amount, but it will take the Revenue some six weeks to return it without any interest what so ever.
I always thought it was up to the tax payer to pay the correct tax not just have it taken.

prog
sorry about the moan

Pennywise

They're the rules I'm afraid. Just make sure that you contact HMRC as soon as possible to get them to send you the relevant form (P53) and keep a record of all your phone calls and copies of everything you post to them (in case things don't run smoothly!).

There's instructions on the following website about this together with links to find the relevant tax office address:-

http://www.hmrc.gov.uk/incometax/overpaid-thro-pension.htm#5

Don't expect it to run smoothly. I've had to do P53s for a few clients and also my mother, and had problems with them all. Trouble is that the P53 can't be downloaded - they have to issue it to you, and some of their call centre staff don't know the form exists and/or don't know you can't download it, so you may have to persevere and it would be handy to have a print of the above HMRC webpage to quote to them if you are unlucky enough to get someone who doesn't know about it.

jimmo

Form P53, Wow!
Despite having had a 37 year career in HMRC I can honestly say that I have never heard of a P53 before.
If you go to the HMRC website and enter P53 into the search box you will come up with 7 hits and, as far as I can tell, only 2 of them are remotely relevant to your problem. For what it is worth these are them.
http://www.hmrc.gov.uk/manuals/pommanual/PAYE94081.htm
http://www.hmrc.gov.uk/manuals/pommanual/paye94080.htm
Both of those refer to issuing a P53 (end of year version) and one mentions the previous issue of a P53 (in year version).
I certainly cannot find any instructions on how to issue a P53 (in year version) but the one little clue I can see is that people at HMRC are required to use “Office Clerical Assistant” (OCA). My guess is that is some form of word processing programme internal to HMRC.
I may be completely wrong but I fear that the vast majority of call centre staff at HMRC will, like me, have never heard of a P53 and you will be extremely lucky if you happen to speak to someone who has experience and knows what to do.
I think it is far more likely that you will have to use your people skills to persuade the person you talk to, to open OCA on their computer and see what we cannot see on the internet.
I find it irritating that I cannot find a better answer on the internet for you but somehow, I find it easy to believe that if you had phoned me in my working days and asked for a P53 I would dismiss you as an idiot who hasn’t got a clue.
Keep cool and expect to be rebuffed. Then use your powers of persuasion to get the person at HMRC to go the extra mile for you. It shouldn’t be like this but, sadly, it is.

Gas_Powered_Toothbrush

There's no set P53 form for you to download as when you get it sent out, each one is tailored to the individual. And jimmo is correct, it's just created using an internal word processing software template.

molerat

prog wrote: »

My wife recently cashed in all of her personal pension which totalled less than £18,000.
The rules as we were informed are that the first 25% is tax free and the remainder is subject to tax.
Despite the tax office having all my wifes income details and tax code used for some considerable time, they told the pension company to tax the residue at 30%.
I understand that she can claim back this over taxed sum, which in our circumstances is a considerable amount, but it will take the Revenue some six weeks to return it without any interest what so ever.
I always thought it was up to the tax payer to pay the correct tax not just have it taken.

prog
sorry about the moan

The remainder will not be taxed at 30% but on a 647L M1 basis, as the pension providers are required to do by law, meaning the payment will cross the 40% threshold and will be taxed accordingly. Phone your tax office and explain you have received a pension trivial lump sum and would like an in year repayment and they will send out the P53.