What is Form P55?
The P55 form has been issued by HMRC to speed up the repayment of overpaid tax paid on a flexibly accessed pension payment.
If you choose to withdraw a lump sum from your pension by accessing it flexibly, your pension provider will deduct tax before sending the funds to you.
Usually HMRC permits 25% of a pension lump sum to be withdrawn without having to pay tax and any amount beyond that is typically taxed.
The tax deducted from your lump sum is often at the emergency rate of tax, which may result in you being owed a tax rebate from HMRC.
Form P55 is the way to reclaim your overpaid tax in the current tax year if your pension body is unable to make a tax refund.
Who is the P55 form for?
You need a P55 form if you have received a flexibly accessed pension payment and only taken some of your pension pot.
In addition to complete a P55 you should not be:
- Working or claiming state benefits.
- Taking flexible or regular pension payments before the end of the current tax year.
Why do I need to complete a P55?
As a basic rate taxpayer, you could have paid tax at 40% on your pension pot amount because an emergency rate has been applied.
If you do not fill in a P55, then you will typically have to wait until the end of the tax year to reclaim your tax overpayment.
How do I get a form P55?
You can get a P55 form from HMRC directly and can fill it in online or in paper format.
Access to a P55 online starts with logging into your government gateway account which if you don’t already have one can be created by following HMRC’s online guidance.
If you need to speak to someone about your P55 you should call HMRC on 0300 200 3300.
Depending on the type of inquiry you have about your pension, you have the option to reach out for help from your pension provider, or the charitable organisation Tax Help for Older People.
Do I use Form P55 if I’ve taken all my pension pot at once?
No, you’ll need one of two different HMRC forms instead:
- If you have taken all your pension money and still earn an income or claim benefits, then you need Form P53Z.
- If you have no income and are not receiving any benefits and taken your whole pension amount, then you need Form P50Z.
It’s always worth double checking that you are submitting the right form for your set of circumstances to avoid HMRC rejecting your pension tax rebate claim.
Can I pay less tax on a flexibly accessed pension lump sum?
To minimise your tax liability on a pension lump sum you can consider limiting withdrawals to only the required amount for each tax year.
If you have other taxable income you may be able to keep your total combined income (other income + pension income) below the higher rate tax threshold with careful tax planning.
