Webb calls for tax overhaul on pension withdrawals

In Royal London's submission to the Work and Pensions Committee inquiry on pension freedoms, director of policy Webb (pictured) said HM Revenue and Customs (HMRC) should change the way it taxes lump sum withdrawals, taking only the standard rate tax and collecting any extra tax due through the end-of-year tax return process. He said the change would largely eliminate over-payments and avoid the need to process thousands of refund claims. Under current rules, when individuals seek to withdraw a lump sum from their pension they are usually taxed on an ‘emergency' tax code which results ...