Tax rebate and allowance

Zak64

Hello, 
I am a higher tax payer and I have say 100 left on my allowance (it's more like 48k but let's say for ease of simplicity it's 100). I know that if I want to use all my 100 I just need to put in 80 as gov will contribute with 20 in my pension fund. So far so good.
Then there's an additional 20% I can claim back as tax rebate. But what does this actually mean?

That: 
1) I contribute 80 and government will credit 20 in my pension and additional 20 in my bank account? (so my cost goes to 60 but I still need to do a transfer to my pension for 80)

2) I contribute 60 and government will credit additional 40 in my pension (so I only transfer 60 to my pension)

It's not clear if, when I do my transfer to the pension provider, I need to transfer 80 or 60. 
Thanks in advance
Z.

molerat

You put in 80% of your gross contribution so for £100 that is £80.  The provider adds the £20 tax and you tell HMRC you have contributed £100 to your pension.  They then increase your 20% tax threshold by £100 which will result in you receiving a rebate of any additional 20% tax at some stage.  If you inform them mid year they may adjust your coding to receive the rebate in your pay.  You can only receive a rebate on any 40% tax you actually would / have paid.  That claim can be done on line in many cases.