Length of time for ii to inform HMRC of pension UFPLS?

Notepad_Phil

I'm planning to take a UFPLS from my ii SIPP and am currently calculating the best time to take it - I would like to take it as near as possible to the end of this tax year but want to leave enough time so that I can easily claim back the overpayment of tax that will occur because of the emergency tax that will fall on it, hence want it to appear on the HMRC site towards the end of March at latest.

AJ Bell took 3 weeks between the payment appearing in my bank and it appearing on the HMRC site so I wondered whether this is typical of ii as well or are they typically quicker or slower than that.

Many thanks

Dazed_and_C0nfused

It should be visible on your Personal Tax Account before you receive the payment.

That is because employers and pension payers are meant to send details via the Real Time Information system on or before the date a (taxable) payment is made.

Thrugelmir

Receive the payment in March. File your tax return after the 6th  April. Job done. 

molerat

When I took my first payment from HL it was showing in my tax account same day as I received it, tax code issued next day.

green_man

My recent payment from AJ Bell was on HMRC site the next day (or earlier - I only checked the day after and it was there) so I can only assume something went wrong with your payment. 

Do you mean you want to ensure you have the refund payment received before the end of March - in which case start moving now.  If not then it doesn’t really matter, you just make the claim for the tax year the payment is in.  

Have you done a UFPLS before with II? You just need to make sure you have given II enough time to actually make the payment (likely to be a couple of weeks if Halifax SIPP is representative).

Notepad_Phil

Thanks for the replies. I wonder why my AJ Bell UFPLS took so long to appear on my tax account (using https://www.tax.service.gov.uk/check-income-tax/income-summary ). Hopefully it's not an indication that a ii UFPLS from me will suffer the same fate and be delayed too, but just in case I'll get everything together and start the UFPLS this afternoon.

squirrelpie

If this is your first UFPLS from ii then make it now for £1 or whatever their minimum amount is. Then the tax code will be issued and when you subsequently take a UFPLS for whatever amount you want, it will be taxed correctly.

molerat

squirrelpie said:

If this is your first UFPLS from ii then make it now for £1 or whatever their minimum amount is. Then the tax code will be issued and when you subsequently take a UFPLS for whatever amount you want, it will be taxed correctly.

What you really mean is take a small amount now then you have plenty of time to get the tax code they issue corrected so you can pay the correct tax on future payments (Been there, done that, 2 x 45 mins on the phone to HMRC)

TVAS

Always take it in month 12 = March for 2 reasons a) if you have not taken any pension payment for that year you will get the whole of the tax free personal allowance for that month so 12,500. This is because it is cumulative so month 1 is 1,041 tax free allowance whereas month 12 is 12,500 tax free allowance b) if you take more than that amount any tax paid will be paid quicker as the next tax year is around the corner. The £1 thing is also correct but that should be used if you are not taking the pension payment in month 12 and it is you first time of taking payment. HMRC treat each pension payment as a regular payment rather than an ad hoc payment so if you took 12,500 in month 5 August you would pay the tax rate of earning of 150,000 p.a. rather than 12,500 can you see why it is better to always take it in month 12? Taking it in month 5 means waiting until the next tax year for the refund because HMRC will want to know the earning for the whole of that tax year.  

tigerspill

Mine appeared on HMRC sire around 3 weeks in advance of it being paid.

molerat

TVAS said:

Always take it in month 12 = March for 2 reasons a) if you have not taken any pension payment for that year you will get the whole of the tax free personal allowance for that month so 12,500. This is because it is cumulative so month 1 is 1,041 tax free allowance whereas month 12 is 12,500 tax free allowance b) if you take more than that amount any tax paid will be paid quicker as the next tax year is around the corner. The £1 thing is also correct but that should be used if you are not taking the pension payment in month 12 and it is you first time of taking payment. HMRC treat each pension payment as a regular payment rather than an ad hoc payment so if you took 12,500 in month 5 August you would pay the tax rate of earning of 150,000 p.a. rather than 12,500 can you see why it is better to always take it in month 12? Taking it in month 5 means waiting until the next tax year for the refund because HMRC will want to know the earning for the whole of that tax year.  

Not if a first payment as that will always be taxed at 1250M1 so does not matter when it is taken.  Further payments can be taken as and when the provided tax code allows. HMRC will refund at any time in the tax year if they agree it has been overtaxed.