First Drawdown

Mozza001

So. In April I will be drawing down around 25k per year for the first year.

Had a phone call with the company and I advised I wanted 25k for the upcoming year taken from drawdown pot.(TFLS taken allready) went through various questions and got to the end , he advised as my first withdrawal would be taxed at emergency tax but thereafter would revert back to normal.

Nothing unexpected until I got the docusign, it's for a one off payment at 25k, as opposed to 25k ÷12 monthly payments.

Not the end of the world I thought and couldn't see any big disadvantage, I actually like the idea of having the ££ guaranteed in my bank, ie if there was a crash July I still have my.income and could just pay myself 12 monthly payments .

However, I'm going to get emergency taxed on 25k, would I have to wait until next tax year to claim this back or will.i get it back the month after?

If so I need to make another hour long.phone call.

I do work, earning 25 k per year.

Brie

I took less than this but still had the emergency tax (which surprised me) but once I understood why it was fine. Money was refunded within a few weeks automatically when it was obvious I wasn't going to be getting that amount every month.

DRS1

If you don't take any more taxable payments from that pension in 26/7 then you may need to fill in a form to get the tax back. But maybe you could take a small amount in March 27 and get the tax back then?

Taking a big amount in the first month of a tax year is probably not a good idea,

Isthisforreal99

Taking £25k in month 1 of the tax year is not a good idea for number of reasons and it will be more than a case of claiming a refund.

As HMRC will assume it's a regular income of 12 x £25k you may find your personal allowance being reduced to nil against your salary and paying more tax there as well.

Do a smaller withdrawal initially then update HMRC of your estimated income for the full year which should generate the correct tax code (BR unless you are in Scotland).

Also, any taxable investment income that could see you straying into higher rate tax territory?

Mozza001

https://forums.moneysavingexpert.com/discussion/comment/81909372#Comment_81909372

Can't really as any more this year with put me in higher bracket

Mozza001

https://forums.moneysavingexpert.com/discussion/comment/81909431#Comment_81909431

I think it will be easier sllround to get them to amend it to 25k÷12 monthly payments

I had a nightmare this year with small pot payments, been on emergency tax since Nov at work, I've that to sort out in April

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81909473#Comment_81909473

Noted but I was talking about 26/7 which is next tax year.