By James Rodger

Copyright birminghammail

HMRC has issued a warning over people dipping into private pensions. State pensioners who don’t solely rely on their Department for Work and Pensions ( DWP ) are being warned they could face the crosshairs of the taxman. Taking to social media to isue a warning, HMRC said: “Check before you dip into your private pension pot – it could be tax avoidance and could cost you a lot more than you think.” Common examples of situations where payments are classed as unauthorised include “trivial lump sums in excess of £30,000,” HMRC said. READ MORE UK households can get free home renovation worth £30,000 to make house warmer Other examples are when continued payments of pension after the member’s death or when a scheme realises it incorrectly calculated the amount of the member’s pension pot following a transfer of funds or purchase of an annuity and the balancing payment is made directly to the member. Other examples are most lump sum payments to cash-in or access pension funds before age 55 except when the member retires due to ill health or if before 6 April 2006 the member had the right under the pension scheme to take their pension before age 55. Certain movements of pension funds within a pension scheme are also classed as unauthorised payments. HMRC, which is the tax arm of the Labour Party government, says: “Where the unauthorised payment is made to or for a member it’s the member who’s responsible for paying the tax charge – even if they did not receive the payment. If the payment is made after the member’s death the person who receives the payment is responsible for paying the tax. “Where the payment is made to or for an employer participating in an occupational pension scheme it’s the employer who’s subject to the unauthorised payments tax charge. “The rate of the unauthorised payments charge is 40 per cent.”