What is Form P53? 

Form P53 is for individuals who have taken a small pension lump sum in the current tax year.

When you receive a trivial commutation lump sum by taking all of your pension as cash or a small pension lump sum your pension provider will usually deduct tax from your payment.

The amount of tax deducted from your trivial commutation lump sum will be taken before you are paid by your pension provider.

HMRC usually allows the first 25% of your pension lump sum to be free from tax after which emergency tax is often deducted meaning you can overpay tax.

HMRC allows you to reclaim overpaid income tax on pension lump sums by using the form P53 or one of the other pension tax rebate forms.

When do I need to complete a form P53?

You should use the form P53 if you receive a trivial commutation lump sum and you have taken all of your pension as cash or a small pension lump sum.

It’s a good idea to check that you are completing the correct HMRC form to avoid delays in repaying your pension tax rebate.

When you don’t need form P53

• You should use form P53Z instead of the P53 if have flexibly accessed and emptied your pension pot or received a serious ill health lump sum.
• If you have only partially withdrawn from your pension pot and are not getting regular payments, HMRC typically requires form P55.
• If you have taken out your entire pension pot as a lump sum and have no other taxable income, you will need form P50Z.

Is there a deadline to submit a P53?

It’s crucial to note that your P53 must be submitted in the tax year you have received your small pension lump sum.

If the deadline is missed HMRC should assess your tax position after the tax year ends and refund your pension tax rebate automatically.

What do I need to complete a P53?

The P53 requires personal details such as name, address, and national insurance number, along with information about your income which for PAYE taxpayers can be found on forms like a P60 or P45.

Individuals usually need to provide supporting documents and an explanation of why they believe their income tax was calculated incorrectly.

To ensure a successful refund process, accurate information and supporting documentation must be provided when submitting the form to HMRC otherwise it can be rejected.

How do I submit  P53 to HMRC?

HMRC provides an online option and a P53 paper version which can be posted to them.

You can also complete your P53 online but you will need to login through your government gateway account.

How do I receive a P53 tax refund?

HMRC will review the claim and determine if an income tax refund is due after the submission of Form P53.

You will be sent a P800 tax calculation showing the value of your income tax repayment and normally repaid via bank transfer or by cheque.

Can I pay less tax on a pension lump sum?

It’s possible in some cases to either avoid tax on your pension income or apply strategies to lessen the taxable amount of your pension lump sum.

One tactic to minimise tax on pension lump sums is to limit withdrawals to only what is essential for each tax year.

When drawing pension income or taking a lump sum, you might be able to reduce your tax liability by keeping your total taxable income below the higher tax rate limits.

Pension tax support and information

Before taking a pension lump sum it can be worth finding out as much as you can so you can make the best decisions based on your future retirement strategies.

Depending on the type of pension enquiry you have you can ask your pension provider, HMRC or the tax charity tax help for older people for assistance.