31 October 2018

“New figures show HMRC ‘over-taxing spree’ moves up a gear”

2 min read

 
Steve Webb - Director of Policy

Steve Webb

Director of Policy, Royal London

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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.

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For further information please contact:

Steve Webb, Director of Policy

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.

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