How do I stop tax being deducted at source

ToonExile

I have just taken early retirement and received my P45 today. I am about to move my pension into flexible draw down after taking my 25% tax free lump sum. Once this pension is in draw down I will be taking monthly amount from that Pension. In addition to that i have a small Local Government Pension which has been in payment for around 2 years.

On looking at the amount of taxable pay I have earned in this financial year and my two pension payments my total earnings will be under my annual tax allowance.

I have two questions.

• Both my pension providers tell me they will deduct tax at source, how do I get this stopped? as I will have no Tax to pay this year or next year.
  
• My second question is how do I claim back the tax i have paid to date?

comeandgo

You need to contact HMRC and explain your pensions to them.

uknick

To answer your question, how do I claim back the tax, use a P50 form. It takes a couple of months to get the tax back, depending on when you submit it.

https://www.gov.uk/government/publications/income-tax-claiming-tax-back-when-you-have-stopped-working-p50

With regard to the pension income for future years, you could split your personal allowance between the pensions based on what each is so no tax is taken at source.

xylophone

Once this pension is in draw down I will be taking monthly amount from that Pension.

HMRC should send a code to the provider.
The code on your LGPS pension is likely to require adjustment.

You can telephone HMRC and explain your circumstances. Early in the morning is a good time to get through.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees

You might wish to set up a personal tax account.