My father entered into a flexible drawdown product in March 2012, having previously been in a capped drawdown product with the same provider (he is 71 years of age).
His intention has been to draw the maximum amount of money he can from his fund each year so that he remains within Basic Rate tax (he has approximately £22k of other pension income per annum from both State and an employer final salary pension).
With this in mind he requested drawdown of £20k from the provider, and this has been made in April 2012 (2012-13 tax year). The provider has applied tax code/basis of 810L to to the payment which has resulted in tax of £7,839 being deducted meaning the net payment was £12,161.
I appreciate that he will have a basic rate liability of 20% to pay and that, assuming his other income receipts in the current year means he is only liable to basic rate tax for the year, under self assessment he will be able to reclaim the additional tax suffered at the end of the tax year.
Is there any way to accelerate recovery of the near £4k of additional tax he has suffered - he would like to benefit from the interest (however small that may be given the current economic climate) rather than allowing the tax man to?