Qualifying loan interest payable + Pension

Hi My wife made full use of her 40K pension allowance last year as her company deducted 40k of earnings and paid it into their company DC scheme, her company also added an additional 17K to make that 57K for the year. All ok as she had huge carry forward allowances from previous years. Basically we don't have to put anything on the tax return as we know we have enough carry forward. She then had approximately 30K of P60 verified earnings and some tax taken (call that 4k) and of course paid NI. again no issue. We then injected, into a different DC pension in Feb 2023, a credit which triggered a refund from HMRC totalling 30K. So all in all she did not earn anything last year. Doing her tax return she has some Other Allowable Interest that she can declare but when we do this the system wants to issue her with a refund as it thinks she has paid tax (4K tax above on earnings at work on P60) ... why would it do this when we paid into a DC pension and used (the pension provider reclaimed the tax) the 4K up that way. Yes we have entered the pension gross and one off amounts on the "paying into registered pension schemes" boxes and assumed the system would know she had paid into her pension and deducted it from her over all earnings. I would have expected the system to say "thanks for the other allowable, but you do not have any credit with HMRC to cover this" so you may wish to carry it forward to the future, or similar, basically a red flag of sorts. Do we just accept HMRC will issue a refund or change the value later on and say why we think we are not entitled to a refund? I would rather HMRC did not send us any money. thanks for your help

Hi
There is a box to declare any repayment made by HMRC during the year. On the paper tax return, you would enter the tax repaid in box 1 of page TR6 of SA100.  On page 3 of 3 when tailoring your return, click 'yes' to the question ""Have you had any 2022-23 Income Tax refunded or off-set by us or JobCentre Plus?"".
 

Thank you for the reply. I will do this. kind regards