PAYE code and tax relief

aroominyork

I have just received my 2013-14 PAYE code from HMRC and they have included an allowance for pension relief because I am a 40% taxpayer. However all my pension contributions (5% employer's pension scheme + 10% AVC) are taken at source before tax is calculated. So I don't understand why extra tax relief is being given since I only pay tax on the balance of my salary after the pension contributions are taken.Have they made a (generous) mistake?

jem16

aroominyork wrote: »

So I don't understand why extra tax relief is being given since I only pay tax on the balance of my salary after the pension contributions are taken.Have they made a (generous) mistake?

It shouldn't have an extra allowance so yes it's a mistake.

How does HMRC know about the extra pension relief? Have you claimed via a tax return or by phone?

somethingcorporate

Get it corrected, if it is a mistake then you will end up owing tax.

jamesd

Normally if you tell HMRC about pension contributions they will take that to mean after tax contributions. Did you perhaps enter the salary sacrifice amount in a tax return box for pension contributions, unintentionally misinforming HMRC and claiming tax relief you're not entitled to?

jem16

jamesd wrote: »

Normally if you tell HMRC about pension contributions they will take that to mean after tax contributions. Did you perhaps enter the salary sacrifice amount in a tax return box for pension contributions, unintentionally misinforming HMRC and claiming tax relief you're not entitled to?

That's where I was heading james.

There should be no need to inform HMRC (either by phone or via the tax return) of any pension contributions where it's made from gross contributions or salary sacrifice.

So yes it's a mistake but a mistake made by the OP rather than HMRC.

aroominyork

No idea where it came from. I haven't had any discussions wiht HMRC which mentioned pension. Thanks for the help.

jem16

aroominyork wrote: »

No idea where it came from. I haven't had any discussions wiht HMRC which mentioned pension. Thanks for the help.

Very odd then.

Does the allowance match what you are paying in to your AVC?