Self Assessment Tax Return required due to in year tax refund on flexibly accessed pension?

Lagrange

In 2024/25 I drew from my personal pension for the first time. Income tax was deducted so I made an income tax repayment claim during the tax year. Income tax was repaid in full as the taxable amount drawn was below my personal allowance. My only other income for 2024/25 was bank interest of about £250 and dividend income of about £100. HMRC are aware of this as estimates of other income were required when making the repayment claim. 
HMRC have written to me saying I need to complete a tax return for 2024/25 as I claimed an in year tax refund on my flexibly accessed pension.  This is not  a problem for me but I have never seen this requirement mentioned anywhere before. I was below state pension age in 2024/25.
HMRC's online self assessment tax return requirement questions do not mention this and tell me that I do not need to compete a Tax Return.
Please let me know if you have come across this.  

Dazed_and_C0nfused

Lagrange said:

In 2024/25 I drew from my personal pension for the first time. Income tax was deducted so I made an income tax repayment claim during the tax year. Income tax was repaid in full as the taxable amount drawn was below my personal allowance. My only other income for 2024/25 was bank interest of about £250 and dividend income of about £100. HMRC are aware of this as estimates of other income were required when making the repayment claim. 
HMRC have written to me saying I need to complete a tax return for 2024/25 as I claimed an in year tax refund on my flexibly accessed pension.  This is not  a problem for me but I have never seen this requirement mentioned anywhere before. I was below state pension age in 2024/25.
HMRC's online self assessment tax return requirement questions do not mention this and tell me that I do not need to compete a Tax Return.
Please let me know if you have come across this.  

I have never heard of that being a reason to need to file a tax return.

Are you absolutely certain your only three source of taxable income in 2024/25 were,
Pension
Interest
Dividends

Does the HMRC letter say exactly this?

I need to complete a tax return for 2024/25 as I claimed an in year tax refund on my flexibly accessed pension. 

Lagrange

Yes - only three sources of income as listed. 

To quote from letter:

Why you need to fill in a tax return 
You need to fill in a tax return because you claimed an in year tax refund on you flexibly accessed pension. This repayment claim means that a tax return is required for the tax year ended 5 April 2025 and the repayment you received needs to be declared on the tax return. 


I believe that this may be incorrect and may telephone the helpline.  

sheramber

Lagrange said:

Yes - only three sources of income as listed. 

To quote from letter:

Why you need to fill in a tax return 
You need to fill in a tax return because you claimed an in year tax refund on you flexibly accessed pension. This repayment claim means that a tax return is required for the tax year ended 5 April 2025 and the repayment you received needs to be declared on the tax return. 


I believe that this may be incorrect and may telephone the helpline.  

Could it be due to the size of the payment/ refund?

Lagrange

As the payment was the first from my pension it was taxed on an emergency tax code and the tax was about £1500. 
 I believe HMRC can ask for a Tax Return to be completed even if none of the normal conditions apply. I think I will just be easier to complete it.
Thanks for the comments.        

Albermarle

Lagrange said:

As the payment was the first from my pension it was taxed on an emergency tax code and the tax was about £1500. 
 I believe HMRC can ask for a Tax Return to be completed even if none of the normal conditions apply. I think I will just be easier to complete it.
Thanks for the comments.        

Yes, maybe some randomly generated request.
Seems a bit daft though as they have an objective to reduce the number of people who need to fill out tax returns.

Dazed_and_C0nfused

Lagrange said:

As the payment was the first from my pension it was taxed on an emergency tax code and the tax was about £1500. 
 I believe HMRC can ask for a Tax Return to be completed even if none of the normal conditions apply. I think I will just be easier to complete it.
Thanks for the comments.        

That is true but it seems odd to have given such a specific reason up front, when that reason isn't one that warrants a tax return!

And you are probably correct about filing the return being the easiest option.

badmemory

Once you have been asked to fill one in are you not obliged to do so every year until they tell you it is alright to stop - in writing.

eskbanker

badmemory said:

Once you have been asked to fill one in are you not obliged to do so every year until they tell you it is alright to stop - in writing.

Or you can proactively tell them of any change in circumstances if you believe you no longer need to self-assess:

https://www.gov.uk/self-assessment-tax-returns/no-longer-need-to-send-a-tax-return

But yes, you still need to wait for them to confirm, rather than assuming!

Green_hopeful

I wonder if you could get them to agree you don’t need to submit a tax return. I used to have a rental property and completed self assessments as a result. When I stopped I wrote to them and explained why I didn’t need to do it anymore and they wrote back to agree with me. If you wrote now you might get an answer before the self assessment deadline. Keep the letter from them if they agree because I had a few chasers on later years but I just sent them a copy of their own letter and they stopped.