Thursday 14 May 2015

HMRC Admits P55 Form Badly Worded

 
HMRC is making urgent changes to a new tax refund form (P55), issued following the government’s pension reforms, after admitting it is “badly worded” and is causing confusion.
HMRC said it would update the form “as soon as possible”, after pensioners complained that the document, issued only a month ago, was misleading.

HMRC has since apologised to a 71-year-old for causing distress after it continually advised her to use the form to reclaim several thousands of pounds in overpaid tax, when the document stated she was ineligible to use it due to her circumstances.

HMRC issued form P55 on April 6 to help pension savers reclaim 30-day refunds on any overpaid tax, if they had accessed their pension pots under the new freedoms. Many savers were expected to face big upfront tax deductions as HMRC had also instructed pension providers to tax accessed pension cash withdrawals at an emergency rate, unless the taxpayer had supplied a P45.

However, Margarete Petrie 71, who had money deducted after she took cash from her pension last month, said the form made it impossible for her to claim.

She is quoted by the FT:
The P55 form cannot be used to reclaim tax if the person is taking more than one payment in the year, which I intended to do.

This is clearly stated on the form.”
Mrs Petrie was involved in several communications with her pension provider and HMRC, which insisted she use the form to reclaim her tax.
I felt like I was banging my head on a brick wall.

I want to reclaim this tax, but the form was saying one thing and the tax authorities another.”
After the Financial Times intervened, the HMRC conceded that people in Mrs Petrie’s situation could still claim a refund using P55, but the form was “badly worded” and was causing confusion.

An HMRC spokesman said:
I can confirm that it is possible to use form P55 to ask for a repayment. 

We will certainly look at updating the wording on the form as soon as possible and are sorry for any confusion the wording is causing.

We apologise to Mrs Petrie for the distress and inconvenience we have caused her and her family.”
The tax system is a nightmare.

Who will deliver us from it?????

Tax does have to be taxing.

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