HMRC repays over £33m in overpaid pensions tax in Q2

HMRC repaid a total of £33,689,819 in Q2 2022 to people who overpaid tax when they flexibly accessed their pensions, according to the latest government Pension Schemes Newsletter.

This is up from the £22,317,529 repaid in Q1 2022, although it represents a slight year-on-year fall, with £33,033,966 paid out in the same period in 2021.

The tax repayments on flexible withdrawals are necessary as HMRC applies an emergency 'month 1' tax code on the first withdrawal, which can lead to an initial over-taxation.

People reclaiming overpaid tax must fill in one of three forms, with HMRC processing a total of 10,018 forms during the period, including 7,345 P55 forms, 1,746 P53Z, and 927 P50Z.

The newsletter also provided an update on the number of transfers into Qualified Recognised Overseas Pension Schemes, rising from 3,000 in 2020 to 2021, to 3,900 in 2021 to 2022, with a total value of £517m, up from £416m in the previous year.

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