Pension withdrawals overtaxed
Analysis shows that savers overtaxed on pension freedom withdrawals have reclaimed £716m since 2015. The first three months of this year have seen more than 7,000 official reclaims made to HMRC, with these worth £23m. People are overtaxed when they access their retirement flexibly for the first time in a tax year, with HMRC applying an emergency ‘Month 1’ tax code on the withdrawal. People can then apply to pull the money back via a reclaim form or wait for the tax office to rectify the matter at the end of the year. A good taxation advisor or tax expert will be able to help people concerned about steps to take.