State pensioners have been urged to check for three documents which could see them handed THOUSANDS from HMRC. State pensioners are being urged to look for three documents and whether they can get thousands from the Labour Party government tax arm.
Finance experts at credit score group CredAbility warn people of state pension age, born before 1959, may mistakenly been put on an emergency tax code and be owed a refund. Aaron Peake, personal finance expert with the group, said: “One of the most common reasons for paying too much tax on your pension is taking a lump sum from a defined contribution pension.
“When you withdraw more than the 25% tax-free amount, HMRC often applies an emergency tax code, assuming you’ll be taking that amount every month. This can lead to an overpayment running into the hundreds or even thousands of pounds.”
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Mr Peake warned: “HMRC might apply the wrong tax code, meaning more tax is deducted than necessary. This can be especially common if your total income falls below the personal allowance (£12,570 for most people in the 2024/25 tax year).”
Mr Peake said: “Look at your pension statement, payslips, or your tax code notice. If your tax code ends in ‘W1’ or ‘M1’, that’s a sign emergency tax has been applied. You can also use HMRC’s tax checker online or call them if you’re unsure.”
Discussing P55, P53Z, or P50Z forms, Mr Peake explained: “These can be submitted online or by post. If you’re reclaiming tax from a previous tax year, you might need to write to HMRC instead.”
If you’ve paid too much Income Tax on a flexibly accessed pension payment you can claim a refund if all of the following apply: you’ve flexibly accessed your pension pot but not emptied it, you will not be taking regular or flexible payments before the end of the tax year OR the pension body is unable to make a tax refund
If you’re not a UK resident for tax purposes, you do not need to fill in this form. For the tax year you’re claiming for, you’ll need to tell HMRC the name, address and PAYE reference of your employer — if you expect to receive income from paid employment.
You’ll also need the name, address and PAYE reference of your pension provider.
