Steve Webb: HMRC tax code stance moving in right direction but still work to do

'HMRC has belatedly accepted that the status quo is unacceptable'

clock • 4 min read

PA asked Steve Webb to share his insight on HMRC's method of taxing pension freedoms withdrawals and what may change following a recent technical update...

Since 2015, pension freedoms have given people a lot more choice about how they access their defined contribution (DC) pension pots.   But with that choice has come considerable complexity about the way in which those pension withdrawals are taxed.   In particular, the process of imposing an ‘emergency' tax code on the first withdrawal has led hundreds of thousands of people to be over-taxed over the last decade.   From an HM Revenue & Customs (HMRC) perspective, of course, the system is perfectly reasonable.   When someone first accesses their DC pension pot (beyond any tax-fre...

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