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Claiming Tax Back
NorthernGeezer_2
Posts: 159 Forumite
Bit of background…………………….
I will be retiring at the end of this month having worked for the one month of the tax year 18/19.
Paid by PAYE and taxed accordingly, this will be my only earned taxable income for the year therefore I will be entitled to a tax rebate.
Pension wise It is my intention to withdraw my tax free 25% AND an amount up to my tax threshold this year, accepting of course that I will pay tax on this under an emergency code.
Given I am under 65, not in receipt of my state pension, or any other pension for that matter, do I use form P55 to claim back both these tax over payments or is it a different form for each claim?
I will be retiring at the end of this month having worked for the one month of the tax year 18/19.
Paid by PAYE and taxed accordingly, this will be my only earned taxable income for the year therefore I will be entitled to a tax rebate.
Pension wise It is my intention to withdraw my tax free 25% AND an amount up to my tax threshold this year, accepting of course that I will pay tax on this under an emergency code.
Given I am under 65, not in receipt of my state pension, or any other pension for that matter, do I use form P55 to claim back both these tax over payments or is it a different form for each claim?
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Comments
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You won't be able to claim back tax on both payments, as you have indicated.
If you withdraw pension funds to maximise your personal allowance then you will have used up your tax free capability therefore either some of your pension payment will be taxed (even after reclaiming emergency tax) or you just accept the tax paid on your one months salary. Unless you are a HRT payer in which case you could reclaim the taxation over and above the 20% BRT.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
I took the OP to mean that his taxable income (both salary AND pension) for the year will be carefully managed to stay just below the threshold and that as tax is likely to be deducted from both sources he would like to know the correct way to reclaim this.
Sorry OP can cant help with the correct claim form to use but if you dont get the answer here just call the HMRC help line.
regards
Rob0 -
Robber, you are correct in your assumption, salary AND pension.0
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Ok, my misunderstanding.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
I did the same thing 2 years ago, worked for 1 month [April] and then drew out an amount just under my tax allowance from my pension. I phoned HMRC up and explained it all and got my overpaid tax back a few weeks later. 2 tax years later and i'm still drawing one lump sum out each year, just below the tax allowance, paying tax and then phoning them up to reclaim it. It's just the way the system works, and they are very polite. 0
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Mark
I thought the way the system worked was once you had your tax code from your initial withdrawal it stayed with you all the time.
If you draw your annual amount in March they don't tax you on it given that its month 11, or am I wrong?0 -
I don't know if you draw it out in March. I draw mine out at the beginning of the tax year, this year on April 12th, and they assume I'm drawing out the same amount (£11800 this year) every month! I 'll phone them up after May 12th to claim my tax back. Again. Sorry I can't be anymore help.0
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I don't know if you draw it out in March. I draw mine out at the beginning of the tax year, this year on April 12th, and they assume I'm drawing out the same amount (£11800 this year) every month! I 'll phone them up after May 12th to claim my tax back. Again. Sorry I can't be anymore help.
Clarly that's a nonsense way of handling your drawdowns. I'm with CSD and they used tax code BR for my very first drawdown back in 2014 and get a BR code issued by HMRC every new tax year. I go online to HMRC and check my codes so do know this is how it happens.The questions that get the best answers are the questions that give most detail....0 -
But a BR tax code deducts tax at 20% on all income.
While it stops you going into the higher rates it doesn't help when trying to prevent paying any tax.
Withdrawing a year's income as a lump sum in April is always going to be a problem. Withdrawal of a lump sum in March is better but would mean waiting a year to switch.0 -
greenglide wrote: »But a BR tax code deducts tax at 20% on all income.
While it stops you going into the higher rates it doesn't help when trying to prevent paying any tax.
Withdrawing a year's income as a lump sum in April is always going to be a problem. Withdrawal of a lump sum in March is better but would mean waiting a year to switch.
I take my annual pension on 6/Apr each tax year (subject to the random whims of iii) and then submit form P55 - this used to produce a bank transfer, but now I get a letter of confirmation followed by a cheque - progress I guess!0
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