HMRC and ridiculously long telephone waits

[Deleted User]

Dazed_and_C0nfused 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.

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.

All agreed. Given my background I feel a bit foolish that I just accepted what my wife was told. It will be rectified.

[Deleted User]

So - after speaking to two people, there is a tax reference and we have progress.

Back to the op question. He/she should obtain the tax reference from the SIPP provider and ask HMRC to allocate sufficient allowances to that source to enable future income to be paid without tax deducted. I will be doing just this tomorrow on my wife’s behalf - at 8am.

molerat

When I withdrew from my HL SIPP last year they immediately reported it to HMRC who allocated a BRX code so I contacted them to allocate BR so it took the first payment into account for future withdrawals - all done within a week of the initial payment. MrsM also had a code allocated immediately after her first withdrawal.  I suspect op's problem is doing something that needs manually adjusting at one of the busiest times of the year, outside of those times things happen pretty quickly.

[Deleted User]

molerat said:

When I withdrew from my HL SIPP last year they immediately reported it to HMRC who allocated a BRX code so I contacted them to allocate BR so it took the first payment into account for future withdrawals - all done within a week of the initial payment. MrsM also had a code allocated immediately after her first withdrawal.  I suspect op's problem is doing something that needs manually adjusting at one of the busiest times of the year, outside of those times things happen pretty quickly.

I understand that my wife was informed that 20% would ‘automatically’ be deducted from income withdrawals and took that to mean that nothing could be done about it. Still - all sorted now!