Pension Shocker: Are You Due a Tax Refund?
Thousands of pensioners across the UK are facing unexpected tax bills, with some refunds reaching over £100,000. Since 2015, more than 500,000 people have been overtaxed when accessing their defined contribution pensions. This is due to HMRC applying an “emergency” tax code, assuming withdrawals occur monthly, which drastically inflates tax bills.
The average refund is around £3,342, but many have received much more. So, how can you check if you’re owed a refund?
1. Review Your Tax Code: If it ends with “M1”, you might have overpaid.
2. Check Your Withdrawal: Exceeding the 25% tax-free allowance could mean incorrect taxation.
3. Use Online Tools: Companies like Standard Life offer calculators to help determine if you’re eligible for money back.
To reclaim any overpaid tax, pensioners need to submit one of these HMRC forms:
– P55 for partial pension withdrawals.
– P53Z if you’ve cashed out your entire pot.
– P50Z if you have no other income for the tax year.
Remember, HMRC will refund anyone overtaxed due to an emergency tax code, but claims can be filed earlier to avoid waiting until the end of the tax year. Don’t let this catch you off guard – it might just save your holiday or that new kitchen! Spread the word and make sure your friends and family are informed. 🏡📊💷