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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I need to help my parents complete their self-assessment

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I need to help my parents complete their self-assessment form. Which section/box do they need to select if they want to have their private pensions paid without tax deducted at source? Is this section the same when it is submitted online? They have an accountant but he did not do this last year and the HMRC have advised my parents that they can amend this by selecting the appropriate section on their self-assessment form.


There is no such box in the SA100 tax return so I have no idea what the tax official was talking about. You could put a note in the white space such as "Please review my 2016/17 tax code in light of this tax return". Alternatively, do what I do to have client's tax codes changed and that is to phone the tax office on the number here and have the codes reviewed while you are on the phone. If changes to the codes are necessary, they will be made immediately.

Private pensions can only be paid without deduction of tax if there is no tax to pay for the tax year on those income sources and the state pension which is paid gross in any event.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.

Thank you.

We were advised that you can opt to have the payment paid in full rather than tax deducted at source. My parents are only basic rate taxpayers.

One of my siblings said he called the HMRC last year and they advised it could be done via the self-assessment. He said he did find a box on the form and ticked it but cannot remember which part it is in. As he is away, he cannot access any paperwork to check.

Can I check again about having the option to receive payments without tax deducted and notifying via the SA form please?

You cannot opt to have no tax deducted from your pension as it is paid each month if you will have a tax liability on that pension. I shudder to think how many people would not save the tax and end up in debt to HMRC and unable to pay if that were the case.

What I think you are and your sibling are referring to is the option to pay with a single payment any tax owing after the end of the tax year as opposed to having it collected throughout the next tax year but one over 12 months via their tax coding for that tax year. In effect, it is an interest free loan from HMRC. The box you need to put an "X" in is box 2 on page TR6 here if you wish to opt out of the coding scheme for an underpayment.

In summary, the personal allowance is £11,000. If you have a pension of, say £16,000, you will have tax to pay of £1,000 or £83.33 per month. You cannot choose to not pay that tax monthly via the tax code and to square up after the tax year end.

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