HMRC refunds pension freedom users £38m
HM Revenue and Customs has refunded over £38m in July to September 2018 for excess tax on pension withdrawals.
According to HMRC’s pension schemes newsletter, the revenue paid a total of £38.3m for 18,000 claims. This number is up from £28m in the previous quarter and brings the total from the last year alone past the £100m.
The pension freedoms were introduced in the 2014 budget and came into force in April 2015.
Over 1.3m people in the UK have taken advantage of the freedoms to access their pension savings since the second quarter of 2015 withdrawing over £21bn, HMRC said on Friday.
Steve Webb, director of policy at Royal London said: “HMRC must be rubbing its hands with glee as taxpayers are forced to fork out millions of pounds in unnecessary tax on pension withdrawals, all for the administrative convenience of the government.
“The scale of over-taxation seems to be increasing, with £38 million 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.”