I pay into a personal pension. The pension provider claims the 20% basic rate and I show the total payments on my tax return in order to claim the additional 20% as I am a 40% tax payer. I also have rental income. The approximate amount I pay into my pension is also included in my tax code. As a result, I pay a lower amount of 40% tax from pay. When I complete my tax return, my 20% threshold is increased by the amount of pension payments. As such, I then pay 40% on a lower amount of income/profit. What is the purpose of including the pension payments in my tax coding? I initially get 40% relief (via my pay) and then pay 20% less tax via my SA calculation, as above. And this is before the 20% claimed by the pension provider. It seems I'm getting too much relief. Can someone please explain the calculation? Am I fundamentally misunderstanding this? Can I ask for the pension payments NOT to be included in my tax code? Thanks