Help filling in form P55 [Tax back from drawdown]

mayoumba

Hi,
I have taken the TFLS from my SIPP and also my first ever drawdown amount - £10,000.

This is below the personal allowance and I have 'no other income'.

Tax has been deducted that I need to claim back using form P55, which seems OK apart from a few sections I'm not sure how to fill in. Can anyone help/advise?

Q13: Have you or do you expect to receive income from any UK pension during the tax year 2018 to 2019?

It then has 2 tables.
Table 1:
Pension payer’s full name and address.
Full amount of any UK pension income you expect to receive before tax is taken off.

Table 2:Details of pension flexibility payments paid as lump sums:
Name of pension company making the flexibility payment.
Tax deducted.
Taxable lump sum.

Do I fill in both table 1 and table 2? These would be the same pension company, or are they referring to 2 different things.

Then there are questions on taxed and untaxed interest on UK savings and investment income, and dividends from UK companies. Qs 15-21.

I'm ok on my bank/building society interest, but the only investment income and dividends I have are from investments in either an ISA or a SIPP.
Do I need to declare/list these on this form?

Thanks in advance.

drumtochty

Table 1 is for say a small pension that you may well have taken in one lump in a friends specific case around £300. The rest of that small pot was tax free. In your case leave that blank



Table 2 was for my friends SIPP where the pot had say £15,000 in after removal of the tax free lump sum but they withdrew say £9,000 this year and left in £6,500 for future withdrawals.


Make sure that pension providers have submitted their numbers and that they are in your personal tax account account before you complete the form.


The tax rebate was in their account within two or three weeks of completing the online form.


No reason in your case to put those specific dividends in the form as the ISA is outwith taxable income and the SIPP dividends are liable to tax after they are in a pension payment from the SIPP which is when you report them to HMRC as a pension payment not dividends.

saver_ali

One thing to watch out for when you get confirmation of your final tax calculation for the year, is that they don't charge you tax on what should be untaxed savings income.

For tax year 2017-18, I made withdrawals from my pensions of less than the personal allowance, which was £11,500 at that time. Tax had been deducted by my pension providers, but I didn't claim it back immediately. I thought I would get a tax calculation and refund from HMRC by September 2018. When my tax calculation finally came through a couple of weeks ago (nearly a year after the end of the tax year), they are trying to tax me on my £400 of savings interest, so my refund isn't as much as I should be due.

I have spoken to HMRC who agree that there is a mistake, but they can't find a way of correcting it on their systems. I've seen on another MSE forum that there is a software glitch with tax on savings interest if your income is less than the personal allowance. So I'm still waiting for them to sort it out.

Dazed_and_confused

Do you mean you have received a P800 calculation showing total taxable income of less than your Personal Allowance but not all the tax deducted from the pension income is being refunded?

Are you able to post the figures?

There have been posts from people with low incomes who have been getting confused with how tax codes work when savings income is covered by spare Personal Allowance and the savings starter rate and savings nil rate of tax doesn't apply.

But I don't remember anyone posting an issue like yours before.

Have you applied for Marriage Allowance by any chance?

SeniorSam

Do make sure that you and anyone else taking drawdown and being a basic rate taxpayer, ask HMRC to notify your pension provider of your tax code. I have been taking add hoc drawdown since 2013, roughly £10,000 a year and previously had basic tax deducted. This year, my providers have deducted Emergency tax and said that they had a directive from HMRC not to accept the word of clients about tax and only to use a tax code they have officially been notified of.

That change came about early in 2018, but my providers did not notify me, or other clients of the changes. They have appologised, but it's too late to pay the balance, which forced me to make other encashments to meet holiday arrangements. I now have to reclaim the excess tax back.
Sam

saver_ali

Dazed_and_confused wrote: »

Do you mean you have received a P800 calculation showing total taxable income of less than your Personal Allowance but not all the tax deducted from the pension income is being refunded?

Are you able to post the figures?

There have been posts from people with low incomes who have been getting confused with how tax codes work when savings income is covered by spare Personal Allowance and the savings starter rate and savings nil rate of tax doesn't apply.

But I don't remember anyone posting an issue like yours before.

Have you applied for Marriage Allowance by any chance?

Yes, it was a P800. I phoned HMRC earlier in the year and they said I had to wait for it to come through.

I started taking a DB pension mid year when I reached 60, gross £10340, tax deducted by provider £341.20.
Took UFPLS from a DC pot, with £1159 gross (not including tax free amount), tax deducted by provider £231.80.

So total pension £11499.35, tax deducted £573. Just under personal allowance.

Untaxed savings interest £409.

So the P800 said my income was £11908.35.

Then somehow it's listed a deduction of £270 for charitable deductions, which I have no idea about as I've never claimed this previously and we make any charity donations through my husband as I haven't been a tax payer for a few years!

11908-270=11638.35
Deduct personal allowance of £11500, gives £138.35

Then the P800 lists an adjustment of £67, which is Carried across to the "Result" section as total tax payable.

It accepts that I should get 573 back from my pension tax deductions, so 573-67=506 refund due.

That is wrong. I should be getting the whole £573 back, and I shouldn't pay any tax on my savings interest.

I don't claim the marriage allowance as my husband is a HR tax payer.

HMRC agree on the phone that I shouldn't pay any tax for the year, but haven't got back to me to say how they're going to correct it.

I wish I hadn't been so accurate in taking my UFPLS, because if I'd taken another £1 And gone over the personal allowance, I don't think I would have this problem! For the current tax year I'm just over it.

Dazed_and_confused

That is wrong. I should be getting the whole £573 back, and I shouldn't pay any tax on my savings interest.

Firstly, based on the information in the P800 calculation the repayment of £506 is correct.

But there is more to it than that!

You are liable to be taxed on all bar £1 of your savings interest. But at the savings starter rate of tax of 0%

The calculation is retaining £67 of the tax you have paid to effectively pay the basic rate tax relief the charity would have claimed on £337 (the £270 grossed up).

You must at some point, possibly many years ago, have advised HMRC of some gift aid payments. If you didn't gift aid anything in the 2017:18 tax year then you just need to confirm this to HMRC and ask them to send you an updated P800.

With the gift aid removed there will be additional £67 repayment due.

I am at a bit of a loss as to why the HMRC advisor couldn't simply have told you this when you contacted them

saver_ali

Dazed_and_confused wrote: »

Firstly, based on the information in the P800 calculation the repayment of £506 is correct.

But there is more to it than that!

You are liable to be taxed on all bar £1 of your savings interest. But at the savings starter rate of tax of 0%

The calculation is retaining £67 of the tax you have paid to effectively pay the basic rate tax relief the charity would have claimed on £337 (the £270 grossed up).

You must at some point, possibly many years ago, have advised HMRC of some gift aid payments. If you didn't gift aid anything in the 2017:18 tax year then you just need to confirm this to HMRC and ask them to send you an updated P800.

With the gift aid removed there will be additional £67 repayment due.

I am at a bit of a loss as to why the HMRC advisor couldn't simply have told you this when you contacted them

Thanks very much. That explains the £67, which I really couldn't understand. Sounds like the savings interest has been a red herring. Two different advisors haven't given me the correct information, and I did tell them that I hadn't made any Gift Aid donations.

I'm highly confused about where the donations figure came from, because my p800 for the previous year didn't have it, and I haven't Gift aided anything since I stopped working in January 2015.

I did have a running one set up with the National Trust and the local charity shop, but transferred them both to my husband.

I'll call them again tomorrow. Thanks again!

Dazed_and_confused

If you were a basic rate payer I don't think it would stand out in the same way.

Normally gift aid just increases the amount of basic rate tax payable (which can in turn reduce the amount of higher rate tax payable).

So if you were a basic rate payer and, using your figures as an example, had paid £67 tax over and above any repayment due then the gift aid would be irrelevant really.

It is only because you had effectively paid no tax (after any refund due) that HMRC needed to retain £67.

The gift aid may be very old information but there shouldn't be any problem getting them to send you a revised calculation. I don't know for certain but they may want something in writing from you before changing it but I may be behind the times there .

When you contact them you might as well provide the actual gift aid information for 2018:19 and an estimate for 2019:20. Both £0 from what you have said. This will prevent similar issues arising when they review those years.

And yes, the savings interest was a red herring. You aren't able to use the much vaunted Personal Savings Allowance but the savings starter rate of tax has the same effect.

saver_ali

Thank you so much Dazed and Confused! I've spoken to HMRC this morning. It has now been corrected for 17-18 and I should be able to claim the refund shortly. They have also taken it off 18-19 and 19-20, because it had been carried through to those years too.

She thought that when I claimed tax back on an UFPLS in 16-17 they had looked back, found previous charity donations and added it to my record for 17-18. She checked and I wasn't charged for it in 15-16 or 16-17 though. Strange.

Anyway, all sorted now. It's a shame the P800 isn't a bit easier to understand!

Thanks again.

Robianson

I took a drawdown on my personal pension at the start of April. As this is my only income other than PIP.  in previous years I have reclaimed the tax deducted using form P55.

when I look to download the form this year the only for available is for year 2019/20, not this year.   Is this just a delay in releasing the updated for or has the system changed?  I read a headline from an FT article suggesting that people had complained the system/form was too complicated and I wonder whether the process has changed. Anybody got any a advice?