Pension Drawdown - HMRC are an absolute joke

juliedee4663

I retired 5 years ago and as I am not yet state pension age have been living off Pension Drawdown (as has my husband, both with separate pensions). Every year when the new tax allowance comes in my husband draws out the maximum within his tax allowance and a couple of months later I do the same. This means that each year we both have to go through the rigmarole of claiming back the tax which is automatically taken out. I drew down at the end of May and immediately made a tax refund claim. Three months later I am STILL waiting for the refund to come through which is absolutely ridiculous. This is a couple of thousand pounds of my money that they are hanging on to.

Absolutely fuming and just wanted to have a rant.

Lorian

Form checker says they are currently processing claim forms received on 2nd June.

Doing it online on the app is a little quicker than post.

eskbanker

That's the way it works, but it can be mitigated by drawing down monthly instead of annually, or scheduling an annual drawdown late in the year rather than early…

juliedee4663

https://forums.moneysavingexpert.com/discussion/comment/82118328#Comment_82118328

Thanks, should have added that I received a message 2 weeks ago saying they were working on the claim and needed to do security checks.

kermchem

If an employee arranged with their employer that they were going to receive all of their annual salary during the month of May then they would experience the same challenges. The PAYE tax system is designed to deduct tax “as you earn”.
Is there a strong reason to draw all your pension in one go rather than a portion each month?

DRS1

Or maybe draw it all in March instead of May. (Not this tax year of course)

Marcon

https://forums.moneysavingexpert.com/discussion/6681340/pension-drawdown-hmrc-are-an-absolute-joke

Take evasive action! The system isn't going to change any time soon, so why not do as suggested above and change the timing/pattern of your drawdown. That way more of your cash remains invested for longer, and you can reduce your levels of fuming.

Green_hopeful

it’s quite boring to deal with. I have the same. It could be easily resolved with them accepting what you are doing. I was made redundant and put my redundancy money in a sipp. I ended up making repeated tax reclaims. Quite trying. I don’t see why we have to take repeated payments to meet the tax office’s requirements.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82118407#Comment_82118407

You don't have to, but that is a currently available way of avoiding having to reclaim tax, whereas hoping for significant reform to how PAYE works isn't…

dunstonh

 Three months later I am STILL waiting for the refund to come through which is absolutely ridiculous.

No, it's not. It's to be expected.

This is a couple of thousand pounds of my money that they are hanging on to.

The alternative is not to take it all in one go like that. Take some more later in the year. Or leave it until later in the year. Doing it in month one or month two before HMRC have been supplied with interest data from the banks is just asking for the delay.

Absolutely fuming and just wanted to have a rant.

As it's partly avoidable, it's not really worth having a rant over.

sheramber

April onwards is the busiest time for HMRC.

Self assessment returns are submitted from 6 April onwards. Subcontractors who know they will be due refunds will have ve everything ready to complete and submit their return so as soon as possible.

From May you are into the holiday period so reduced staff numbers available.

Add to this the government have regularly reduced the staffing levels.

I submitted details for my cl as I’m which was registered as received 27 April. I got my repayment and amended code number two weeks ago.

While such a delay is not right it is normal in the present circumstances.

The person to direct your rant to is your MP.