Avoiding emergency tax code when starting SIPP drawdown

[vrdiver]

I've heard that when first starting to take money out of a SIPP the amount received can be a lot less than anticipated as an emergency tax code is applied. This can obviously be sorted out over time, but is there a way to get the correct tax code to be used?

In my case, Mrs VRD will have a pretty good forecast of her total earnings for the relevant tax year.

VRD

[pochisoldi]

I've heard that when first starting to take money out of a SIPP the amount received can be a lot less than anticipated as an emergency tax code is applied. This can obviously be sorted out over time, but is there a way to get the correct tax code to be used?

In my case, Mrs VRD will have a pretty good forecast of her total earnings for the relevant tax year.

VRD

The emergency code will be applied to any payment(s) for which a notice of coding has not been received.

For a one off payment the fix is to draw a token payment, wait until HMRC inform the provider of the correct tax code and then take the intended amount. (and take a further token payment towards the end of the tax year to mop up any unused personal allowance and get an immediate tax refund).

For a sequence of regular payments, the situation fixes itself as soon as the tax code is provided, payments made before the tax code is received will be taxed on the emergency code - the next payment will contain a refund of any excess tax paid.

Remember that the emergency code only prevents the use of accumulated unused tax allowances.
Or put another way, each payment only gets the benefit of 1/12th of the personal allowance, regardless of any income (or lack of it) earlier in the tax year. It doesn't mean you pay 20% tax on the whole lot...
See: https://www.gov.uk/tax-codes/emergency-tax-codes

PochiSoldi

[xxd09]

Hi VRD
When I started flexibly accessing my SIPP some years after taking the 25% tax free amount I just sent a P55 form into HRMC after I had received the cash from the Pension provider
ie asked for £12000 - got £8500-sent in P55- got £1800 back one month later.
Done this a few times now and seems to work OK
I only had a State Pension as an other source of income which make calculation simple
Very straight forward
Pension sum requested from SIPP plus State Pension minus Personal Allowance -taxed at 20% in my case
xxd09