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Posted 5 days ago by tenaciousjohnny
I am still working and paying into my pension. I took a tax free amount from my SIPP to pay for something. In the end I did not need the full amount so I paid 20K back into my SIPP. After the fact I realized that this would be seen as pension recycling which I didnt know about when I paid the money in. I asked the SIPP provider if they could refund the amount and they said this would be challenging due to pension rules. I then asked them if they could refrain from claiming the basic rate tax on the amount. Again they said this would be challenging due to rules and their process. I will be completing Self Assessment in April and of course I will not claim additional tax relief for this amount. I am thinking I should highlight this error on the self assessment form so that the basic rate tax relief on the 20K can be added to my self assessment. I see that there are potential penalties that can be applied to the entire tax free amount I withdraw which I am obviously keen to avoid. What are the correct steps I should take to resolve this error. Thanks in Advance

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