HMRC and ridiculously long telephone waits

enthusiasticsaver

Surely it is not beyond the realms of possibility for HMRC to give a rough idea of how long you have to wait to get to speak to someone on the phone? 36 minutes so far after the third or fourth time of trying where I gave up eventually. 

 I had tax deducted from my private pension withdrawal in 20/21 even though I am a non tax payer and the amount withdrawn kept me within the personal tax allowance on top of my DB pension.  I filled out the online claim form to get it back and even though apparently it should have been dealt within a three week period we are now two weeks past the deadline and according to my online progress on the government gateway site they have not even started working on it  yet. I am due to withdraw another amount in the next week or so for this tax year and undoubtedly will have to go through the same palaver again unless I speak to them as my IFA suggests.  

Anyone else been in the same position? 

[Deleted User]

Phone at 7.59 am. Not universally known that they open before 9 am - but, if I keep telling people......

enthusiasticsaver

Useful to know thanks.  The ironic thing is that when I did eventually get through to speak to someone at HMRC I asked first of all what is happening to my tax rebate claim as it is overdue to be processed and she said someone would be calling me within 13 days to deal with it.  When  I asked why someone needed to phone me she said it was to verify my identity and asked me for a password to confirm as my claim had been made online as suggested  everywhere I read on how to submit it.  The phone call will be coming from a withheld number which means I will have to answer my mobile whereas normally I ignore all calls which do not come from known numbers due to the number of nuisance calls I get.  What a crazy system.  

I suggested that they make a note that my personal tax withdrawal being made within the next few weeks should not have tax deducted as it has been calculated to keep me within my PA and it would be a waste of HMRC and my time to deduct tax and then me have to claim it back but was told that was not how the system worked.  

[Deleted User]

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Jeremy535897

[Deleted User] said:

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Interesting. Is that because they have allocated all her personal allowance to the DB pension? SIPP pensions can have a tax reference, and HMRC will issue notices of coding to the administrators.

enthusiasticsaver

[Deleted User] said:

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Yes it  looks like exactly the same situation I have.  My DB pension, marriage allowance I give to my DH  plus the £3k a year I take from my SIPP keeps me just within the PA.  No tax is deducted from my DB pension but they do take it from my SIPP necessitating me to claim the tax back each time. So much easier taking money out of my ISA but I have a further 5 years until my state pension kicks in which then means me paying tax again so I feel I should use the PA each year. 

My IFA says the same as Jeremy and that HMRC should be able to allocate some of my PA to my SIPP as the DB pensions are well within the allowance. 

[Deleted User]

Jeremy535897 said:

[Deleted User] said:

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Interesting. Is that because they have allocated all her personal allowance to the DB pension? SIPP pensions can have a tax reference, and HMRC will issue notices of coding to the administrators.

No - she withdraws just enough to keep below the personal allowance remaining after her DB pension. She remains NNL.

I will pester the SIPP provider again. Surely there must at least be the option of 20% or no tax at all!

[Deleted User]

enthusiasticsaver said:

[Deleted User] said:

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Yes it  looks like exactly the same situation I have.  My DB pension, marriage allowance I give to my DH  plus the £3k a year I take from my SIPP keeps me just within the PA.  No tax is deducted from my DB pension but they do take it from my SIPP necessitating me to claim the tax back each time. So much easier taking money out of my ISA but I have a further 5 years until my state pension kicks in which then means me paying tax again so I feel I should use the PA each year. 

My IFA says the same as Jeremy and that HMRC should be able to allocate some of my PA to my SIPP as the DB pensions are well within the allowance. 

My wife has a DB pension, transfers MA to me, has a SIPP and is five years off state pension. Do I know you? 🤔

Jeremy535897

All I can say is that when I took pension income from my SIPP, all my personal allowance was allocated to it and 20% tax was deducted from any excess, but I haven't drawn anything for a couple of years.

[Deleted User]

Jeremy535897 said:

All I can say is that when I took pension income from my SIPP, all my personal allowance was allocated to it and 20% tax was deducted from any excess, but I haven't drawn anything for a couple of years.

My wife’s SIPP is with HL. I have just read their fact sheet and there seems to be a tax reference. Someone has been misinforming me! Time for a telephone call.

https://www.hl.co.uk/retirement/preparing/tax-matters/emergency-calculator

Dazed_and_C0nfused

[Deleted User] said:

I have exactly the same problem, or at least my wife does. She has a DB pension under PAYE and a SIPP now moved to withdrawal. We have been informed by the provider that tax will automatically be deducted at 20% despite the fact that she is a non-taxpayer. This is the correct treatment. The main problem is that there is no tax reference relevant to the SIPP and, accordingly, HMRC cannot issue a tax code to the provider. Any withdrawal will always have 20% tax deducted. 

I have accepted this until this time, primarily as claiming tax back does not present an issue for me given my tax background,  but will query this again now. I will let you know what happens but, at this stage, I don’t see any other remedy.

Got to say that all sounds very unusual.

Normally the first payment has the emergency tax code applied by the SIPP provider and then once HMRC are notified of the pension being in payment they will allocate a tax code appropriate to the individuals current circumstances.

I would expect claiming tax back will cause an issue as you(r wife) will be trying to claim PAYE tax back on pension income which HMRC have no record of.

Might be worth your wife checking her Personal Tax Account after the first payment has been made in case someone at the pension company has got the wrong end of the stick and they do in fact report the payment through the RTI system.