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Posted Mon, 16 Dec 2024 23:47:34 GMT by veer4646
Hello Admin, I'm in the process of completing my 2023/24 self-assessment but confused as to how my tax code factors into the tax calculation. My final tax code notice has tax code of 1933L (i.e. higher than the default 1257L). The 1933L code has been used by my employer for PAYE, The amount of tax paid through PAYE appears to be correct as per a 1933L code. The PAYE notice has following details: ------------------- Your tax-free amount Personal Allowance £12570 Personal Pension Relief £6762 Total £19332 Total tax-free amount £19332 Tax code 1933L -------------------------- As others have noted (e.g. https://community.hmrc.gov.uk/customerforums/sa/1923338f-6555-ed11-97b2-00155d9c9a65), the self-assessment tax calculation is based on the default 1257L. Can you please advise whether I need to claim "Personal Pension Relief" of "£6762" in self-assessment? If so, which field/section do I need to use to claim it? Thank you for your help.
Posted Mon, 23 Dec 2024 17:21:35 GMT by HMRC Admin 10 Response
Hi
You would claim the personal pension relief if your pension contributions were taken from your net pay and you are a higher rate tax payer. On the online Self Assessment form in the tailor your tax return section you would answer yes to the question- Did you make contributions towards a personal pension or retirement annuity? This will open the section to declare the pension contribution made to receive the tax relief.
Posted Mon, 23 Dec 2024 20:13:41 GMT by Clive Smaldon
Not HMRC....n.b. the amount in your code is not the tax relief you claim. That is an estimate HMRC have given based on previous information. IF you are entitled to claim tax releif on pension contirbution you would enter the amount of the contribution in the tax year (which is often different than the coded figure) in whichever section is relevant by reference as to whether your pension contributions are within a company scheme (and whether before or after tax) and/or whether external to the company and SIPP etc.
Posted Sun, 05 Jan 2025 21:12:45 GMT by Adi
@veer4646 I'm in the same situation as you, did you find the solution?
Posted Wed, 15 Jan 2025 18:29:48 GMT by maxb
@Adi A tax code is only an instruction from HMRC to employers/pensions operating PAYE, to tell them how to calculate how much tax during the year, based on ESTIMATES, so that at the end of the year, if your tax affairs are simple, you should have paid roughly the right amount. When you do Self Assessment, it looks back at the whole year and recalculates everything based on what actually happened. The numerical value of the tax code is not involved - now the amounts actually earned, and amounts actually deducted, are what matters. The important detail, though, is that any circumstance that was mentioned as part of how your tax code was arrived at, needs to be included in the Self Assessment so that it can arrive at an appropriate whole year calculation. In the example given by veer4646, the two circumstances were "Personal Allowance" - largely handled automatically by the online tax return site - and "Personal Pension Relief" - you do need to declare personal pension contributions that give rise to such relief in the return to claim it. Personal pension contributions actually make for a good example - unless you contribute exactly the same amount year on year, the amount in your tax code will usually be an estimate based on last year's contributions. When you fill in Self Assessment, you claim the actual amount you really contributed, and receive an adjustment to tax for any change. I hope that helps - to put it another way, the statement earlier that "the self-assessment tax calculation is based on the default 1257L" is a misunderstanding - actually the self-assessment calculation defaults to including £12,570 Personal Allowance, in its own right and not by reference to a tax code, and pretty much all other allowances, reliefs and charges require something to be filled in somewhere.

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