01308 488066
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Can I reclaim tax taken from a one-off pension payment?

If you have taken a trivial commutation from a final salary pension or a small lump sum from any other type of pension it is usually taxed at 20%. Check first, to see if you are owed a tax refund, in most cases the tax is correct, but sometimes there is an underpayment. If you are due a refund complete form P53.

If you have taken a payment under the pension flexibility rules it is slightly different. These payments are usually taxed on 'emergency code' which generally takes too much tax. Again check if you are due a refund. There are two scenarios and the form you use depends on whether;

  • you have taken all of the money from your fund - You receive a P45 - Use form P50Z if you have no other PAYE income, use P53Z if you have other PAYE income
  • you take part of your money - HMRC will issue a tax code to the provider for future withdrawals, If you are going to take more money out in this tax year you can't get a refund in year and should wait for HMRC's reconciliation process to receive the refund. If you intend the first payment to be the only one in the tax year you can use form P55 to reclaim any over paid tax

All forms can be found on www.gov.uk, search for the form number or via your personal tax account (register via www.gov.uk/personal tax account). Alternatively contact HMRC on 0300 200 3300.

For either type of lump sum, people in Self Assessment generally reclaim/pay overpaid or underpaid tax via their tax return at the end of the year. However, in year claims can be made, but the information must also be provided in the tax return at the end of the tax year.

If you need help to check whether you are due a refund you can call Tax Help on 01308 488066.

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