How to claim back Tax Overpayment on Drawdown via SA

tim123456789

At the end of TY 2025-26 I took a lump sum out of my Pension of £30K, this used up the remainder of the standard rate tax band for the year.

I was expecting this money to be fully taxed by the pension provider at 20%, but they taxed it at 40%, resulting in an overpayment of £6000.

I know that I can reclaim this tax via my SA for 25-26, but I cannot work out which options to select to get to this box on the form. There doesn't seem to be an appropriate question to get this box to appear.

Can anybody tell me what I have to do?

Aside - does this money count as income for the purposes of repaying my winter fuel allowance? Something I forgot about when deciding how much to draw down :-(

Dazed_and_C0nfused

There is no such box as no separate reclaim option is available to you now.

You simply enter the pension income (and tax deducted) as normal in the relevant boxes on the return and they will be taken into account in the Self Assessment tax calculation.

Yes, taxable pension income will be counted for Winter Fuel purposes.

tim123456789

Oh, OK so I just treat the amount as a payment of my pension to me. - Done!

Bet I'm in the tiniest minority of people who have submitted their completed YE tax return on the first day of the next TY, especially as it's not even a working day for most people. (I was actually a bit surprised that HMRC had even bothered to make the option available today.)

Thanks for your help

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81952052#Comment_81952052

There are always a few early birds over on the Cutting Tax board, often traders operating under the Constriction Industry Scheme rules.

https://forums.moneysavingexpert.com/discussion/6662896/2025-26-self-assessment-tax-return

tim123456789

When I used to freelance, I found that the enforced 2 week Christmas break was the ideal time to sort out my paperwork, and then I would spend the next 3 weeks fussing over whether I had missed anything before filing 2 days before the deadline.

Though I would always be owing HMRC a payment so I had no incentive to do it earlier.

There was panic when HMRC suggested that the deadline of Jan 31st was too long and should be moved sooner, but they back-tracked on that idea in favour of a scheme of staged payments in advance based upon previous year's turnover.

and now we have monthly filing (or something or other)

Ciprico

If you are in same situation but haven't been doing SA for several years so haven't been asked to fill one out, is the correct tax still worked out eventually, or you you have to manually request to do a SA...?

Tx

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81953081#Comment_81953081

I think if you don’t currently do a SA and have no other reason to do one you would use form P55 instead

https://www.gov.uk/guidance/claim-back-tax-on-a-flexibly-accessed-pension-overpayment-p55

tim123456789

I re-opened my SA account last year as that was the first year since giving up work that I received a full year's pension, taking my total of Savings interest plus Pension payments somewhat over the nil rate band.

Actually, when I did this HMRC said that "I had no tax to pay", but I thought better and proceeded anyway.

I had forgotten about the additional £5000 "Starting rate for savings", which meant that my expected amount due of around £1200 became £22.

So we were both right. I did owe them some money, and they were right because the amount owed was probably below a de minimis amount for which they don't bother to chase people in a similar position to me who aren't already doing SA, to start.

I have no idea whether HMRC already knew about the total of my savings interest and had worked it out in the background that I didn't need to SA or if they didn't know and just assumed that the majority of people don't have more than £6000 (Starting rate plus personal savings rate) in Interest payments to pay additional tax on.

This year, because of this pension drawdown, I lost the Starting rate for Savings. So in addition to losing the WFA, that's £1200 extra tax that I paid because of it. Now that I know I shall have to be careful in future years how much I draw down from this pension as I work towards emptying it.

Answer to your actual question - No, I don't think that I would have got this tax back any other way than by SA.

Form P55 - this is only available for claiming back interest within the current tax yar. I only decided on doing this drawdown a month from YE, so I assumed that making a reclaim of overpayment would be better using SA as I still had all that additional Savings Interest to declare.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81953203#Comment_81953203

Even if you had used the P55 that wouldn't have stopped you having to complete a tax return.

In fact it makes completing the tax return (very slightly) harder work!

Veloflyer

For my clarity perhaps - if you take drawdown income and are taxed too much - HMRC using emergency tax for example - how do you reclaim the tax? Will the P55 form suffice or must one also complete an SA?

Do you have to do anything even? Does HMRC eventually adjust the tax code automatically to effectively repay the tax?

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81953978#Comment_81953978

The OP didn't want to reclaim the overtax. He preferred to use the self-assessment return. (there are a couple of other threads made covering that)