HMRC repays £50million in overpaid tax – how to check if YOU’RE due a refund

THOUSANDS of pension savers were given tax refunds in the space of just three months, new HMRC figures have revealed. More than £50million was paid back to around 12,500 people who were overtaxed when taking out their retirement savings. The figures are based on those who made flexible pension withdrawals between April and June this year. Each person was paid back almost £4,000 on average. Sign up for the Money newsletter Thank you! Overpayments are usually taken out because emergency tax codes are often applied when retirees first access their pension flexibly. That can mean the amount of tax owed is calculated incorrectly, as it’s not based on the person’s actual income. The number of reclaim forms submitted is slightly lower than for the same period last year. But the total refunded amount has increased by around £2million. Adam Cole, retirement specialist at Quilter, told GB News the average repayment was “not an insignificant amount of money“. “Retirees are being left out of pocket while they wait for HMRC to return their own money – a process that could and should be quicker or avoided altogether,” he said. Most read in Money How to get your cash back You can claim your money back if you think you have been overtaxed by HMRC Credit: Alamy If you’ve withdrawn a large amount from your pension pot, you need to fill in a form to get your cash back as quickly as possible. You can wait for HMRC to review your tax code at the end of the tax year and it will process a refund, but obviously this means you could be waiting a while. To get the cash back faster, you can fill in one of three forms: a P55, P53Z or a P50Z which can all be found on the Government’s website. Which form you need to fill out will depend on how you have accessed your retirement pot: If you’ve emptied your pot by flexibly accessing your pension and are still working or receiving benefits, you should fill out form P53Z, If you’ve emptied your pot by flexibly accessing your pension and aren’t working or receiving benefits, you should fill out form P50Z, If you’ve only flexibly accessed part of your pension pot then use form P55. HMRC says it aims to process refunds within 30 days. To avoid having emergency tax deducted in future, try taking smaller amounts out rather than one lump sum. Comment now