HMRC debts and Pension Pot

[Hurley1961]

Hi.

Long story short.

I have outstanding debts with HMRC going back to 2005, mostly due to not filing my SA returns.

Most of it is fines and assumptions of my earnings, even though I probably haven't earned

more than £5-8000 a year since the first year.

 

 

We've lived hand to mouth since then, and hidden from our responsibilities, and the debt is now over £9000.

I accept that due to me burying my head in the sand, it is entirely my own fault.

 

My question is this.

I am about to take one of my private pensions as a lump sum (around £40k)

and I need to know whether HMRC will help themselves to everything they say I owe, before I'm paid out.

 

 

I realise that I will be taxed at the emergency rate, and that they may well keep the overpayment to clear my debt,

but that wouldn't cover it all.

Can they take any more to cover the balance owed?

 

Thanks in advance for any advice.

[honeybee13]

Hello there.

 

Just to clarify if I may, you're taking the whole of your pension pot and paying tax on some of what you withddraw?

 

HB

[Hurley1961]

Yes, I'm taking the whole pot. So that would be 25% tax free, and should be basic rate for the remainder, but without a P45, I'll have to pay emergency tax,.

 

I did pluck up the nerve to call them this afternoon, and they confirmed that they would probably keep the overpayment to pay off what I owe, although as it stands, that would still leave me owing about £3000. That is about the amount that I will be disputing, so hopefully I can get that cancelled out.

[honeybee13]

Good idea to ring them, I hope this works out for you.

 

Thank you for updating the thread.

 

HB

[Hurley1961]

Whilst posting a new thread, I realised that I had left this one hanging a little, and that always bugs me. So, to tie up the loose end, I did in fact receive a full refund of my overpayment, about 2 weeks after I sent in the claim form. Seems that HMRC has too many hands that are unaware of each other.

[antone]

Whilst posting a new thread, I realised that I had left this one hanging a little, and that always bugs me. So, to tie up the loose end, I did in fact receive a full refund of my overpayment, about 2 weeks after I sent in the claim form. Seems that HMRC has too many hands that are unaware of each other.

 

Thanks for letting us know. It's actually a matter of the way the system operates - a Self Assessment underpayment can be included in your Tax Code under some circumstances, but pension drawdowns are typically taxed on a "Month 1" basis by the provider and your code doesn't really come into it. So even if the person who processed your refund was aware of your SA debt, there wouldn't have been anything they could do about it.