Figures published today show that the amount of over-paid tax on pension withdrawals has surged in the last three months, with more than 18,000 people forced to claim back tax which they paid but did not owe.
The latest HMRC Pensions Schemes Newsletter shows that in the period July to September 2018, HMRC processed 18,000 claims for repayment of excess tax on pension withdrawals and the amount reclaimed was over £38 million. This compares with £28 million in the previous quarter and brings the total amount reclaimed in the past four quarters alone past the £100 million mark.
Commenting, Steve Webb, Director of Policy at Royal London said:
“HMRC must be rubbing their hands with glee as taxpayers are forced to fork out millions of pounds in unnecessary tax on pension withdrawals, all for the administrative convenient of the government. The scale of over-taxation seems to be increasing, with £38m having to be paid back in the latest quarter. There must be a better way than the current system where taxpayers have to fill in one of three forms to claim back the tax that they should never have had to pay in the first place.”
- ENDS -
For further information please contact:
Steve Webb, Director of Policy
- Email: Steve.Webb@royallondon.com
- Telephone: 07875494184
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June.
At Royal London, we’re proud to champion the value of impartial advice. We believe it plays a crucial role in connecting people with the products that are right for them – and is key to delivering better outcomes and experiences for our customers. At the same time, it helps to build trust in our products and services.
Royal London works alongside advisers not in competition with them. That’s why we’ve made some key commitments to the intermediary market. You’ll find more detail on our commitment to advisers at http://adviser.royallondon.com/campaigns/our-commitments/