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In the first three months of 2022, the HMRC paid more than £22 million as part of the flexible payment from pensions plan.
In its latest Pensions Scheme Newsletter for April 2022, the HMRC revealed it had processed nearly 10,000 forms in relation to the pensions scheme, including 4,693 P55 forms, 1,903 P53Z forms and 816 P50Z forms.
The total value of money paid out was £22,317,529.
The scheme was first started in 2015 and Pension Freedom rules introduced then states that from the age of 55 people can freely access their cash but withdrawals above the 25 per cent tax free amount are taxable at an individual's marginal rate of income tax.
The latest data shows that in the first quarter of 2022, the average amount per claim was £3,011 per claim and there were around 7,400 claims processed by the tax authority.
Although relatively high, the figure for Q1 2022 is actually a decrease from the same time last year when £23 million was repaid and considerably less that Q4 in 2021 £42.1 million was repaid to 13,000 people.
The latest newsletter also revealed that HMRC received 1,591 applications to register new pension schemes for 2021 to 2022, representing an 89 per cent decrease from 2012 to 2013.
Of the schemes that applied for 2021 to 2022, 79 per cent have been registered, 13 per cent were refused registration and no decision had been made on the remaining 8 per cent.
“Nobody will overpay tax as a result of taking advantage of pension flexibility. Individuals can claim back any overpayment due to an emergency tax code being applied immediately and we will repay this in 30 days. Anyone who does not claim will be automatically repaid at the end of the year,” the HMRC said.