Can I claim a partial tax refund before end of year?

Iwanttobefree

Have taken money out of pension to clear mortgage due to ill health.

Have been taxed at 40%

I will have to pay some tax, but I will be nowhere near the 40% tax bracket at the end of the tax year.

Can I claim 20% tax back on the entire amount now, and leave the other 20% paid, and they can sort out what I owe at the end of the tax year?

Thanks

xylophone

https://www.gov.uk/government/publications/flexibly-accessed-pension-payment-repayment-claim-p55

Dazed_and_confused

Can I claim 20% tax back on the entire amount now

No. It is likely the emergency tax code was used so the tax deducted is almost certainly a mix of 0% (by virtue of the bit of Personal Allowance allowed against the pension payment), 20% and 40%.

You may however be able to claim the excess tax deducted over and above your expected tax liability.

Iwanttobefree

Dazed_and_confused wrote: »

No. It is likely the emergency tax code was used so the tax deducted is almost certainly a mix of 0% (by virtue of the bit of Personal Allowance allowed against the pension payment), 20% and 40%.

You may however be able to claim the excess tax deducted over and above your expected tax liability.

I've taken out my 25% tax free.

In addition (separate payment) I've taken out £19,949.88

They've (pension company) paid £7,258.15 tax from the £19.949

Wife gets married tax allowance, so my personal allowance is £10,660

Taxable Employment Support group benefit equals approx £6065, if I take that off my allowance, it leaves £4,595 of my allowance left.

Therefore I should get approx £4,595 of the £19,949 tax free, and pay 20% on the remaining £15,354.

I make that £3,070.80 tax due, meaning I should be entitled to £4187.35 tax back.

Does that make sense (I'm thinking of "You may however be able to claim the excess tax deducted over and above your expected tax liability")

Makes no odds if I wait until April in the long term scheme of things, I will still be paying 85% of my mortgage off now, and the remainder in April next year, will still be mortgage free in 4 months.

But it does mean for 3 months (or until they give me the refund) I pay interest on 4k of my remaining mortgage, whereas if I can claim it now, I can pay an additional 4K off my mortgage meaning I've paid off 96% now and only have 4% left to pay in April (well less than 4% as will try to make old payments top it for next 3 months)

Edit: The pension company has sent me a payslip for the £19k, pay date 6/12/2019. Period 09/2020

Does that mean for some reason my tax year ends in September next year and not 5th April?

Dazed_and_confused

You've got your tax years mixed up.

The Personal Allowance in the current tax year for someone who has applied for Marriage Allowance is £11,250, not £10,660.

But that marginally increases the tax refund that appears to be due to £4,305.

As I understand it you can claim now however any refund will only be a provisional one, if for example your taxable ESA is different to the amount you expect you may receive a slightly different refund and have to pay some back or will get an additional refund once HMRC review things after the end of the tax year.

Rememeber that by taking the pension payment you have lost the ability to use the savings starter rate of tax in this tax year and will now just have the savings nil rate available. Not an issue unless you expect your taxable interest to exceed £1,000.