How to declare lump sum from pension

Bandy2023

Hi, all
I've been a PAYE employee all my working life, so self-assessment is new to me.
I'm completing my self-assessment for 2023/2024 and declaring child benefit, but I also took a taxable lump sum of £10k out of my pension ( already had my tax free lump sums )
I actually received just over £7000 from the withdrawal of £10K, so some tax has very obviously been paid on it.
Which part of the self assessment form does this get declared in?
Do I declare the £10000 or the amount I actually received after the tax?
I obviously want to avoid paying tax 'twice' on the £10000, as I've evidently paid some already, but I'm also aware I may be due 'some' more than the (just under) £3k already paid.

zagfles

You declare the gross amount, also any tax paid. Just like you do with PAYE employment, just in a different section. Surely you got a "payslip", and a P60 at the end of the tax year? If not, ask them for one. 

Dazed_and_C0nfused

Bandy2023 said:

Hi, all
I've been a PAYE employee all my working life, so self-assessment is new to me.
I'm completing my self-assessment for 2023/2024 and declaring child benefit, but I also took a taxable lump sum of £10k out of my pension ( already had my tax free lump sums )
I actually received just over £7000 from the withdrawal of £10K, so some tax has very obviously been paid on it.
Which part of the self assessment form does this get declared in?
Do I declare the £10000 or the amount I actually received after the tax?
I obviously want to avoid paying tax 'twice' on the £10000, as I've evidently paid some already, but I'm also aware I may be due 'some' more than the (just under) £3k already paid.

It goes in the pension income section.

As with any other taxable income you declare the taxable amount.  £10,000.  And you include the tax deducted at source.

What happened under PAYE is just provisional, Self Assessment is where you will "pay" the tax due.  But you include the tax deducted at source so you get credit for that.

Albermarle

I obviously want to avoid paying tax 'twice' on the £10000, as I've evidently paid some already, but I'm also aware I may be due 'some' more than the (just under) £3k already paid.

In simple terms they will add up all your taxable income, work out how much tax you should have paid ( taking into account personal allowance etc ), then look at how much tax you have paid.
If you have paid too much tax you get a rebate, if you have paid too little they will want some from you.
You will not pay tax 'twice'

Bandy2023

zagfles said:

You declare the gross amount, also any tax paid. Just like you do with PAYE employment, just in a different section. Surely you got a "payslip", and a P60 at the end of the tax year? If not, ask them for one. 

Yes I get a P60
I've no idea why you said "surely" there.

.Dazed_and_C0nfused said:

Bandy2023 said:

Hi, all
I've been a PAYE employee all my working life, so self-assessment is new to me.
I'm completing my self-assessment for 2023/2024 and declaring child benefit, but I also took a taxable lump sum of £10k out of my pension ( already had my tax free lump sums )
I actually received just over £7000 from the withdrawal of £10K, so some tax has very obviously been paid on it.
Which part of the self assessment form does this get declared in?
Do I declare the £10000 or the amount I actually received after the tax?
I obviously want to avoid paying tax 'twice' on the £10000, as I've evidently paid some already, but I'm also aware I may be due 'some' more than the (just under) £3k already paid.

It goes in the pension income section.

As with any other taxable income you declare the taxable amount.  £10,000.  And you include the tax deducted at source.

What happened under PAYE is just provisional, Self Assessment is where you will "pay" the tax due.  But you include the tax deducted at source so you get credit for that.

I'm looking at the self assessment page now, I literally can't see a section that allows me to say I paid tax on the lump sum already.

Dazed_and_C0nfused

Bandy2023 said:

zagfles said:

You declare the gross amount, also any tax paid. Just like you do with PAYE employment, just in a different section. Surely you got a "payslip", and a P60 at the end of the tax year? If not, ask them for one. 

Yes I get a P60
I've no idea why you said "surely" there.

.Dazed_and_C0nfused said:

Bandy2023 said:

Hi, all
I've been a PAYE employee all my working life, so self-assessment is new to me.
I'm completing my self-assessment for 2023/2024 and declaring child benefit, but I also took a taxable lump sum of £10k out of my pension ( already had my tax free lump sums )
I actually received just over £7000 from the withdrawal of £10K, so some tax has very obviously been paid on it.
Which part of the self assessment form does this get declared in?
Do I declare the £10000 or the amount I actually received after the tax?
I obviously want to avoid paying tax 'twice' on the £10000, as I've evidently paid some already, but I'm also aware I may be due 'some' more than the (just under) £3k already paid.

It goes in the pension income section.

As with any other taxable income you declare the taxable amount.  £10,000.  And you include the tax deducted at source.

What happened under PAYE is just provisional, Self Assessment is where you will "pay" the tax due.  But you include the tax deducted at source so you get credit for that.

I'm looking at the self assessment page now, I literally can't see a section that allows me to say I paid tax on the lump sum already.

Have you tailored your return correctly?  You need the pension income section.

Bandy2023

Apologies, this is baffling to me.
Anyone fancy doing a quick calculation for me (virtual pint to be bought)

From my P60 - I'm in SCOTLAND and my tax code is S1257L
Income for the year 2023-2024 = £56399.72 / tax paid = £ 11722.28

Here's the extra bits I've received:

Child benefit received = £ 1248.00 / no tax paid on this as yet
Tax lump sum = £ 10000 / tax paid on this already = £ 2952.07

When using the self assessment it's steering me towards £0.00 being owed, which I don't think/know is correct.
Can anyone calculate for me please?

greatkingrat

Your allowances will all have been used for your main salary, so the pension lump sum should be taxed entirely at 42%.

So you should owe the difference between 4200 and 2952.07, plus the child benefit charge.

Bandy2023

greatkingrat said:

Your allowances will all have been used for your main salary, so the pension lump sum should be taxed entirely at 42%.

So you should owe the difference between 4200 and 2952.07, plus the child benefit charge.

I'm getting totally lost now..
I get £1248.00 child benefit.
When I go into the 'child benefit tax calculator' this is what comes out:
How the hell can the tax be 63%????

Tax charge to pay

The estimated tax charge to pay is £786.00.

QrizB

OK, if I use the MSE income tax calculator here and input your details (taxable income for 23/24 tax year of £56399.72 plus £10000, live in Scotland) it calculates an income tax liability of £15,930.

You've already paid £14674 in income tax, so you look to owe a further £1256, which is "4200-2952" as quoted by greatkingrat.

You'll also be liable for HICBC of 63% of £1248, which is £786. This matches the HICBC liability you've quoted above. (It's 63% because, in 23/24, it was "1% for each £100 of taxble income above £50k". If you'd earned an extra 28p it would have cost you £12 more in HICBC.)

zagfles

Bandy2023 said:

zagfles said:

You declare the gross amount, also any tax paid. Just like you do with PAYE employment, just in a different section. Surely you got a "payslip", and a P60 at the end of the tax year? If not, ask them for one. 

Yes I get a P60
I've no idea why you said "surely" there.

Because the P60 give you the figures for the tax return, usually highlighted. 

On the tax return, box 11 in the pensions section says "Pensions (other than State Pension), retirement annuities and taxable lump sums treated as pensions – the gross amount. Tax taken off goes in box 12"

So you put the gross amount from your P60 in box 11, and the tax deducted in box 12. Just like you do with the P60 for employment income (except that obviously goes in the employment section not the pension section).