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Tax deducted at source on a private pension

What do you have to do to recieve your private pension gross and not have tax deducted at source?

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I have a client who is 61, she has employment income and dividends. She also recieves a private pension. The pension has tax deducted at source and she recieves a P60 at the year end so there is no issue of overpaying or underpaying income tax, she simply wants to recieve her pension gross and have the adjustment go through her tax code and affect her salary.

Is it possible and how would I go about it? As I said the net effect is the same whatever happens but she wants it this way.

Thanks

 

Replies (11)

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By Matrix
30th Jul 2019 12:29

If you are her tax agent then you call HMRC and ask for her personal allowance to be allocated to the pension.

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Hallerud at Easter
By DJKL
30th Jul 2019 12:34

Try to get a coding notice out of HMRC directing allocation of x amount of code to the pension and the balance to the employment.

Cannot personally see the point, if net cash from both arrives in her bank account which one had the tax deducted is frankly academic when all the pounds merge in the bank account.

Given this will likely take some work to arrange, and your time will have a cost, would she still think it worthwhile if she say needs to pay you £200 to arrange matters with HMRC on her behalf?

Thanks (2)
RLI
By lionofludesch
30th Jul 2019 13:17

It's a lot of effort to save £0.00.

If you let her know how much you'll be charging for this work, I suspect the problem will vanish.

How much is this pension, anyway?

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Replying to lionofludesch:
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By Richard Grant
30th Jul 2019 13:44

About £2,000 pre tax. It's a lot of effort for no net effect, so thanks, it's what I've been explaining.

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Replying to Richard Grant:
Hallerud at Easter
By DJKL
30th Jul 2019 14:02

Especially as you can likely point out that in five years time HMRC will just change things anyway and allocate the allowance ,in the first place, to her then state pension irrespective what she wants.

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Replying to Richard Grant:
RLI
By lionofludesch
30th Jul 2019 14:05

Richard Grant wrote:

About £2,000 pre tax.

At that level, they'll have to estimate it exactly. If they get it wrong, you could have a few quid in unused allowances. Then there'd be the choice of another fee to get that sorted or just abandoning them.

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Replying to lionofludesch:
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By Tax Dragon
30th Jul 2019 14:13

Yeah there's logic in HMRC's preference for allocating PAs against a source that can soak up the PAs - else it's all guesswork and corrections.

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RLI
By lionofludesch
30th Jul 2019 14:12

Crazy idea.

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Replying to lionofludesch:
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By Tax Dragon
30th Jul 2019 14:14

lionofludesch wrote:

Crazy idea.

Oh, you abandoned the ©?

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By Vaughan Blake1
30th Jul 2019 16:36

Assuming that the employment income absorbs the PA, you will be unnecessarily spending hours (each year) trying to put right the mess that will ensue by switching the PA to the small pension.

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By nic1995
31st Jul 2019 08:54

It can be done, I had a similar situation with a client, but it does depends on the level of employment income.
You should contact HMRC.

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