This page is designed to answer some of the questions you may have about the payment and servicing of your annuity.
Is annuity income taxable?
Yes. Your annuity will be treated as pension income under the PAY AS YOU EARN tax regime.
How much tax will I pay?
Unless you have provided the annuity provider with a P45 form, tax will be deducted at the current Emergency Tax Code on a month 1 basis as advised by HM Revenue and Customs. The annuity provider will give HM Revenue & Customs detail of the annuity income that you will now be receiving. HM Revenue & Customs will assess your tax liability and then issue a coding notice that will be sent to both your annuity provider and yourself. Once the annuity provider has received the notification, the relevant tax coding will be applied to the next available annuity payment.
Who should I contact regarding taxation?
Questions concerning your tax coding should be directed to HM Revenue & Customs at the following address: HM Revenue & Customs East Herts West Essex Area Southgate House Stevenage Herts SG1 1HL Telephone Number 0845 302 1460
Will I receive an annual statement?
Yes. Your annuity provider will send you a statement after the end of each tax year detailing the tax coding used and the amount of tax deducted from each payment that has been made.
How will payments be made?
In order to ensure that instalments are received on the correct date your annuity provider will only make payments by direct credit to bank accounts held in the United Kingdom.
When will I receive my Tax Free Lump Sum?
Unless otherwise requested any lump sum payable will be credited directly to your bank account by the annuity provider. This usually takes place within five working days from the date of this correspondence.
When will I receive my regular annuity instalments?
Your annuity payments will be credited direct to your bank account in accordance with the frequency you selected commencing from the start date of your Policy. If a payment is due immediately, this will be credited to your bank account at the same time that any lump sum is paid. If the due date of any payment falls on either a weekend or a bank holiday then the payment will be made on the preceding working day. Please note that once an annuity policy is in force your provider will be unable to change either the frequency or the due date of future payments.
How do I change my tax code?
If you believe your tax code is incorrect you will need to contact HM Revenue & Customs to discuss this.
I live abroad, so, why am I paying UK tax?
Please contact HM Revenue & Customs, Centre for Non Residents based in Nottingham to discuss this matter.
I am self employed, so why is my income being taxed?
Your annuity is treated as pension income under the Pay As You Earn tax regime.
My national insurance number/date of birth/name/address is wrong. How do I change it?
If you believe that any of the information that the annuity providers holds is incorrect then please contact us.
I have paid too much tax, how do I correct this?
If you believe that you have paid too much tax in the current tax year and may be due a refund, then HM Revenue & Customs will need to inform us of your correct tax code. Any rebate that is due to you will be calculated and credited to your nominated bank account along with your next annuity payment. If you have paid too much tax in a previous tax year and believe a refund is due then you should contact HM Revenue & Customs. They will recalculate the tax that you should have paid, and if necessary, will issue you with a rebate cheque directly.
HM Revenue & Customs have sent my annuity provider a new tax code, how will this affect me?
If your annuity provider has been instructed that your new tax code is to be applied immediately, they will update their records. Please be aware this may not be applied to your next payment, as payments are generated up to two weeks before they are due. If they have been instructed that your tax code is to apply from the beginning of the next tax year, they will not enter this on to our system until after 6th April.