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Why you might have overpaid tax through your pension

Common reasons why you may have overpaid include:

• your pension provider has used the wrong tax code by mistake or they don't have the right personal information for you
• your taxable state benefits or other taxable income has reduced and HM Revenue & Customs (HMRC) don't know about it - which means the amount of income included in your tax code is too high
• the amount of annual State Pension included in your tax code is wrong
• you have more than one tax code, because you have several pensions or pension and employment income, and you haven't used up all your allowances on your first tax code but your other tax codes assume that you have
• you paid tax on a retirement annuity before April 2007 (where 22 per cent tax was taken off before you received the pension but you were a non-taxpayer or 10 per cent taxpayer - see article on retirement annuities below)
• you have received one or more pension lump sums (also known as 'trivial commutation') which are payments taken instead of a small monthly pension

• Understand your tax code

• If you have more than one tax code

• Tax on retirement annuities

• Options when you take your personal pension (pensions and retirement planning section)

Checking your tax code if you're in PAYE

If you're employed, or your pension or annuity is dealt with through PAYE you can look at your latest PAYE Coding Notice to check what type of, and the amount of tax-free allowances you get – you will pay tax on anything above your tax allowances.

The PAYE Coding Notice confirms your tax code and this should match the one shown on your employment or pension payslip.

It is usually sent to you before the start of the tax year and also during a tax year if a change of circumstances results in a change of tax code.

If you have several different pensions taxed through PAYE, or you work and get one or more pensions, you should get more than one Coding Notice - in this case it's especially important to check them all.

In certain circumstances, you may not get a PAYE Coding Notice every year - for example if you retire early. If you are concerned that you may be paying too much tax but don't have a document that you can check please contact HMRC.

Read the articles below to find out what to look for.

• Understanding your PAYE Coding Notice

• Check your tax if you have more than one tax code

• Read about allowances that can reduce your Income Tax

• Contact HMRC Opens new window

Claiming a refund through PAYE

If you've just retired and have no pension income due

If you've just retired and don't expect to receive any other sort of taxable income (this includes pension income) at all during the tax year then you should do the following:

• complete form P50 Claiming tax back when you've stopped working
• send it to HMRC along with Part 2 and Part 3 of your P45 (a form that you get from your employer when you stop working for them)
• keep part 1A as a record of income

HMRC will then send any refund due to you in the post.

• Go to form P50 'Claiming tax back when you've stopped working' Opens new window

• Find out more about PAYE form P45

• Contact HMRC Opens new window

If you receive a pension or retirement annuity through PAYE

If you are receiving taxable pension income (including a retirement annuity) through PAYE and you find an error within the current tax year, contact HMRC. They will send a revised PAYE Coding Notice to your pension provider who will adjust the tax code to alter any further payments for that year.

The overpayment will be corrected automatically by your pension provider who will refund the tax in the next payment. You may pay less tax the following month or if it's a large amount you'll get a refund (marked R on your payslip).

• Contact HMRC Opens new window

Making a claim - previous tax year

Tell HMRC why you think you've paid too much tax on your earnings or pensions for the 2011-12 tax year. They may already have everything they need to check your claim. If not, they'll tell you what information they need. HMRC will send you any refund due.

• Contact HMRC Opens new window

Making a claim - 2010-11 tax year and earlier

If you're claiming a refund of tax deducted on earnings or pensions for the 2010-11 tax year or earlier tax years write to HMRC and include any relevant documents about your earnings/pensions during the tax year for which you're claiming, such as:

• P60, P45
• information about your employment and benefit history

In most cases you'll get back the tax you've overpaid as long as you claim on time. Read the section 'Time limits for claiming back tax'.

• Contact HMRC Opens new window

Claiming a refund on a retirement annuity

Since April 2007, income from retirement annuities has been taxed through the PAYE system - if you think you've overpaid in this way see the section 'Claiming a refund through PAYE' above.

However, before April 2007 retirement annuities were taxed at 22 per cent unless you completed a form R89 'Application to receive an annuity without tax taken off', or form R86 'Application to receive a joint annuity without tax taken off'. If you didn't complete one of these forms you may have overpaid tax if you were a non-taxpayer or only paid 10 per cent tax in those years.

The forms R89 and R86 are no longer in use (except for purchased life annuities), but if you've overpaid you'll be able to claim some tax back using form R40 'Tax Repayment' for any periods up to April 2007 - also read the section below on time limits for claiming tax back.

• More on how retirement annuities are taxed Opens new window

• Go to form R40 and help notes on completing the form Opens new window

Claiming a refund on a pension lump sum ('trivial commutation')

If your contributions into a pension fund result in you receiving a small pension of a few thousand pounds a year, you may choose to take it as a lump sum rather than a small amount each month. This is called a 'trivial commutation'. If you've received one or more lump sum payments it's possible that the tax you paid was at a higher rate than you were due to pay over the tax year.

If you want to apply for a refund you'll need to:

• ask HMRC for form P53 'Trivial pension/annuity in-year repayment claim'
• complete the form with details of your estimated income for the year - the form will be tailored to your individual circumstances so you'll only have to provide information that is relevant to you
• send it to HMRC with Part 2 and Part 3 of your form P45
• keep Part 1A as a record of your income

Because the refund is based on estimated figures, HMRC will have to check it at the end of the year. This will mean that they will send another P53 Trivial pension/annuity year end check after 5 April so you can tell them the actual details of your income. If you complete a Self Assessment tax return, you should show the actual detail on your return at the end of the year.

• Contact HMRC Opens new window

• More details on overpaying tax on a lump sum - on the Low Incomes Tax Reform Group website Opens new window

Time limits for claiming back tax

The time limits for claiming a refund are shown in the table below. If you don't make a claim within the time limit you'll miss out on any refund due.

Time limits for reclaiming tax

Tax year	Tax year ended on	You must claim by
2008-09	5 April 2023	5 April 2023
2009-10	5 April 2023	5 April 2023
2010-11	5 April 2023	5 April 2023
2011-12	5 April 2023	5 April 2023

Documents you'll need to make a claim

When you're claiming tax back (except when you're claiming back tax through form R40) you'll need to include any relevant documents about your income during the tax year for which you're claiming, such as:

• payslips
• forms P60, P45
• information about your employment and benefit history
• information about your pensions and other income

How you'll get your refund

HMRC will normally send you a payable order by post, but you can tell them to pay the refund directly into your bank or building society account. You can also nominate someone else to receive the refund and it can be paid to them by post or directly into their bank or building society account.

There are sections about how you would like HMRC to pay your tax refund on all the relevant forms.

• Contact HMRC Opens new window

Claiming tax back for someone else

If someone has appointed you to manage their financial affairs, or if you're a spouse/civil partner or relative of someone who has difficulty making a claim or who has died, you may be able to claim tax back for them.

• Contact HMRC Opens new window

• How to deal with HM Revenue & Customs for someone else

• Claiming back Income Tax on behalf of someone who has died

More useful links

• Getting tax-free interest on savings or claiming tax back

• Ways you pay Income Tax

• How to correct mistakes in your tax

• Age-related and other tax allowances Opens new window

• Tax and National Insurance after State Pension age Opens new window

• Download 'Approaching retirement - a guide to tax and National Insurance contributions' (PDF, 112K) Opens new window

• Help with PDF files

• More details on overpaying tax on a lump sum - on the Low Incomes Tax Reform Group website Opens new window

Useful contacts

• Money, tax and benefits contacts

• National Insurance Contributions Office