Pension contributions & car allowance query in tax return

storeyboy10

Hi everyone - I am completing my tax return for the first time. There is a section

"Payments to registered pension schemes (Also known as PPR) where basic rate tax relief will be claimed by your pension provider (called Relief at source). Enter the payments and basic rate tax"

My situation is quite simple - my employer provides a pension for me to pay into - I pay into it monthly, and my employer also pays into it monthly. What amount should I enter into this box? I have read the description several times, and it's confusing me more.

Apologies if this is a dumb question!

Thank you.

Dazed_and_C0nfused

You cannot answer that question until you know what method is used to contribute.

The three normal methods are,

Net pay

Relief at source
Salary sacrifice (though that actually means you aren't contributing, you are giving up salary in return for your employer contributing more)

storeyboy10

Hi thanks - i believe it is net pay.

Dazed_and_C0nfused

Then you never include them on your tax return.

You have already received the maximum possible tax relief by not paying tax on part of your salary in the first place.

For example salary = £40,000 with 10% net pay pension contributions means your P60 would show (taxable) pay as £36,000 not £40,000.

lisyloo

Bit confused (and dazed :-)
my understand was that you get 25% by default (provider doesn’t know your income details), so if you have other income (for example rental income), the you’d put this on your tax return If you were pushing into 40% tax band.

or have I misunderstood “net pay”?

Dazed_and_C0nfused

That is relief at source.

This may help,

https://www.litrg.org.uk/tax-guides/tax-basics/do-i-have-join-pension-scheme/do-you-know-how-tax-relief-your-pension

storeyboy10

Thanks everyone, I think I am clearer now, I do however have a follow-up question in relation to company car. I am paid a cash allowance for a company car, which I then pay tax on monthly through PAYE - am I right then in assuming I don't enter anything into the box on my tax return in section 14 "company cars and vans?"

Dazed_and_C0nfused

Do you mean you don't have a company car but get a cash allowance which is simply extra wages?

If so this should form part of the taxable pay figure on your P60.

If you didn't have a company car available at any point in 2020:21 then you wouldn't include anything in that box on the return.

storeyboy10

Yes - I didn't actually have a car, I got a cash allowance simply as extra wages.