On this page
In short
- Taking a lump sum from a pension often gets taxed at an emergency rate, as if you took that amount every month.
- The P55 reclaims the overpayment within the tax year if you have not emptied the pot and will not take more payments before 5 April.
- P53Z if you emptied the pot and have other income; P50Z if you emptied it and have none.
- HMRC works out the refund and pays it direct to your bank.
Why the tax is wrong
The first flexible withdrawal is taxed on a Month 1 basis: one twelfth of your allowance and bands applied to the whole sum. A £20,000 withdrawal can lose £7,000 in tax when the real liability is a fraction of that.
Which form
| Situation | Form |
|---|---|
| Took part of the pot, more left | P55 |
| Emptied the pot, other income this year | P53Z |
| Emptied the pot, no other income | P50Z |
What you need
- The P45 or payment statement from the pension provider
- Details of other income expected in the year
- Your Government Gateway ID to file online
Worked example
A retired security officer takes £15,000 with £3,750 tax free and £11,250 taxable. Emergency tax deducted about £3,450. With a state pension of £11,500 his real liability on the withdrawal is about £2,000. P55 refund about £1,400.
Questions
Do I have to claim or will HMRC fix it?
HMRC reconciles at year end and would refund eventually. The form gets it within weeks.
Can Taxpro do this?
Pension refunds are outside our employment expenses service. The form is straightforward on gov.uk.
This guide is general information, not advice about your circumstances. Figures use HMRC rates for the 2026 to 2027 tax year. We are a paid tax agent and not HMRC.
Am I owed a tax rebate? The PAYE guide
Work mileage tax rebate
Tax refund scams: spot a fake