HMRC refunds more than £22m to older people in overpaid tax during first three months of year
dailyrecord.co.ukA senior pensions and retirement analyst is calling on HM Revenue and Customs (HMRC) to simplify its system after thousands of older people reclaimed over £22 million in overpaid tax.
Helen Morrissey at Hargreaves Lansdown has highlighted how between January 1 and March 31, 2022, HMRC paid out £22,317,529 to people who overpaid tax when they accessed their pensions flexibly - between April 1, 2021 and March 31, 2022 HMRC has repaid over £100 million in overpaid tax.
When someone accesses their pension flexibly, they are taxed on a ‘Month 1’ basis which means they are treated as receiving that sum every month - this can lead to tax overpayments.
They must fill in one of three forms to reclaim the overpaid tax. During the first quarter of the year, HMRC processed 7,412 claims for overpaid tax.Helen Morrissey explained: “Pension Freedoms have been in place for several years now and the issue of overpaid tax has always been a problem, yet we continue to see thousands of people overpaying by hundreds of millions of pounds every year.
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