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HMRC pays back almost £4,000 each to thousands of pension savers after new guidance
HMRC said emergency tax codes on flexible pension withdrawals led to overpayments, with the average refund almost £4,000 per saver.
- HM Revenue & Customs refunded more than £50 million to around 12,500 pension savers over the last three months, correcting overpayments caused by incorrect tax codes applied during flexible withdrawals.
- Flexible pension withdrawals often trigger emergency tax codes, causing excessive deductions that require later reconciliation. Personal finance expert Kevin Mountford of Raisin UK urges savers to verify their tax codes if deductions appear unexpectedly high.
- With an average repayment of almost £4,000, Mountford noted that individuals can apply directly to HMRC for refunds rather than waiting for their tax position to be reconciled automatically after a withdrawal.
- Separately, HMRC published updated guidance last month reminding citizens that the State Pension counts as taxable income, even though tax is not deducted from these payments before receipt.
- Annual taxable amounts are calculated based on entitlement rather than bank deposits, using specific weekly rates. For example, a year including an April rate change totals £8,830 in taxable State Pension income.
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Telegraph & Argus+20 Reposted by 20 other sources
HMRC pays back almost £4,000 each to thousands of pension savers after new guidance
HMRC has refunded more than £50m to around 12,500 pension savers. An expert warns people to check emergency tax and pension deductions.
·Bradford, United Kingdom
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- 96% of the sources are Center
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C 96%
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