Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 02 Feb 2023 15:09:48 GMT by CelineH
I am an employee with one company but also an independent landlord. My employer and I pay into a pension, and I understand I receive tax relief on this, so I pay a bit less tax on my payslip than if I wasn't paying into this pension. When I complete my Self Assessment for being a landlord, I am asked how much I earn in my employment and how much tax I pay, as shown on my P60. I'm not asked how much I pay into an employee pension. Therefore it seems the pension relief isn't taken into account in the calculation, and it looks like I haven't paid enough tax. The self assessment calculation therefore requires me to pay more tax than I need to. Is this correct?
Posted Fri, 03 Feb 2023 11:40:32 GMT by Bella Boo
Not hmrc but your description (paying less tax on your payslip) indicates your pension contributions are under net pay arrangements or salary sacrifice, which will mean your p60 figures already takes account of the contributions (p60 figure would be salary, bonus and any other earnings from the employment minus your contributions). It would only be if you were relief at source that it would possibly (if you are higher or additional rate) need to provide any tax relief explicitly in the calculation (as with sal sacrifice or under net pay, it's already taken account of in the lower p60 figure!) Hope that helps.
Posted Wed, 08 Feb 2023 12:17:39 GMT by HMRC Admin 32
Hi CelineH,

Your employer removes the amount that you paid into your pensions scheme, before working out how much tax to pay on the remainder. By excluding the payments to your pension, the reduced figure is your gross taxable pay and this is what is shown on your P60.  

The tax relief is given at source, because that part of your income is not included when tax liability is calculated.  The gross pay figure on your P60, is your pay minus ur pension payments.  For example, if you earned £40000 in a tax year and paid £5000 to a pension scheme.  You P60 would show a gross taxable pay of £35000.

Thank you.

You must be signed in to post in this forum.