SIPP access and P55 tax reclaim

pterri

I’ve stoped work (yay me), I’m being paid up to the 27th may so will have some PAYE income this year as well as having to draw some ISA and SIPP (this is for three years untill my DB kicks in then I’ll rebalance what I draw from where as required).

i intend to take a series of UFPLS chunks from the SIPP, I’ve used some of my tax free allowance through my PAYE which was taxed at at the 40% rate. I know I can fill in a P55 to claim back any overpayment, it’s a faff and I’m a low faff kind of guy. I’m happy to leave it until the HMRC reconcile things at the end of the year, will they do that with out the form? I assume yes. 

molerat

How about passing your P45 on to your pension provider then take a final pension dip in March ?

pterri

molerat said:

How about passing your P45 on to your pension provider then take a final pension dip in March ?

Ok, cool. Is that a thing then? So Vanguard will sort the tax out? I should get my P45 in the next month or so. 

molerat

A pension is just another job as far as the PAYE system is concerned.  You may need to speak to Vanguard about they want to deal with it.

Hoenir

Vanguard won't want your P45 as this relates to employment. They'll apply to the HMRC for a tax code to apply your pension drawdowns. Over the course of the year the tax will self correct. Schedule a drawdown for March 2026 to tidy matters up. 

handful

It really isn't difficult doing a P55 reclaim. I did 2 this year, one for me and another for the OH and it takes a few weeks tp come through but it's a very straightforward process. Otherwise I guess it can just be left and you can get a rebate when HMRC get round to it!

dunstonh

Ok, cool. Is that a thing then?

It has always been a thing.  Pension providers are like employees and will use the P45 in the same way.

Albermarle

handful said:

It really isn't difficult doing a P55 reclaim. I did 2 this year, one for me and another for the OH and it takes a few weeks tp come through but it's a very straightforward process. Otherwise I guess it can just be left and you can get a rebate when HMRC get round to it!

I thought a P55 was just for reclaiming tax overpaid on one off pension payments? Although I could be wrong.
I think in the OP's case they paid some 40% tax on their employment salary and now they are expecting to be a 20% taxpayer over the whole tax year, which is a different scenario.

pterri

Albermarle said:

handful said:

It really isn't difficult doing a P55 reclaim. I did 2 this year, one for me and another for the OH and it takes a few weeks tp come through but it's a very straightforward process. Otherwise I guess it can just be left and you can get a rebate when HMRC get round to it!

I thought a P55 was just for reclaiming tax overpaid on one off pension payments? Although I could be wrong.
I think in the OP's case they paid some 40% tax on their employment salary and now they are expecting to be a 20% taxpayer over the whole tax year, which is a different scenario.

Exactly, I may just leave if for the HMRC to reconcile at year end. Also, I’ll be expecting a payment for the over paid 40% at some point. 

Dazed_and_C0nfused

pterri said:

Albermarle said:

handful said:

It really isn't difficult doing a P55 reclaim. I did 2 this year, one for me and another for the OH and it takes a few weeks tp come through but it's a very straightforward process. Otherwise I guess it can just be left and you can get a rebate when HMRC get round to it!

I thought a P55 was just for reclaiming tax overpaid on one off pension payments? Although I could be wrong.
I think in the OP's case they paid some 40% tax on their employment salary and now they are expecting to be a 20% taxpayer over the whole tax year, which is a different scenario.

Exactly, I may just leave if for the HMRC to reconcile at year end. Also, I’ll be expecting a payment for the over paid 40% at some point. 

That won't happen in the way you seem to be describing.

It should be a single calculation which covers the tax year as a whole and that will include credit for any PAYE tax deducted.

Albermarle

pterri said:

Albermarle said:

handful said:

It really isn't difficult doing a P55 reclaim. I did 2 this year, one for me and another for the OH and it takes a few weeks tp come through but it's a very straightforward process. Otherwise I guess it can just be left and you can get a rebate when HMRC get round to it!

I thought a P55 was just for reclaiming tax overpaid on one off pension payments? Although I could be wrong.
I think in the OP's case they paid some 40% tax on their employment salary and now they are expecting to be a 20% taxpayer over the whole tax year, which is a different scenario.

Exactly, I may just leave if for the HMRC to reconcile at year end. Also, I’ll be expecting a payment for the over paid 40% at some point. 

I was in a similar position. A few months after the tax year ended, HMRC automatically calculated my tax position for that tax year and I got a refund. Mainly based on the 40% tax I paid during the first 3 months of the tax year before I retired. 
However it is a good idea to keep an eye on your online personal tax account.
When you change income sources, it seems to be often the case that mistakes occur.