The Revenue has introduced new rules to make it easier to reclaim overpaid tax on pension withdrawals. Under pension tax rules, where someone does not hold a P45, their first pension withdrawal is taxed under an emergency month 1 code.
Until now reclaiming the tax would have meant waiting until the next tax year, but HMRC has introduced new forms – P50Z and P53Z and P55 – which will allow people to reclaim overpaid tax on pension income payments within 30 working days.
HMRC said: "Claimants presenting their 2015/16 P45 to their pension provider will pay the correct tax. In the event that they don't, any discrepancy will be settled within 30 days of HMRC being notified."
Old Mutual Wealth's retirement planning expert, Adrian Walker, said: "This sensible change of practice is good news. The forms and new process will allow any overpaid tax to be recovered much quicker."
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