Personal Tax. Personal pension scheme

I have the question about the personal pension. I understand that due to this scheme the basic rate should be extended for pension gross amount. the question is when i have also to subtract that from income. Because in some exercises I have to decrease from income and also to extend the rate but in some I don't have to decrease just extending.thank you


  • MarieNoelle
    MarieNoelle Moderator, MAAT, AAT Licensed Accountant Posts: 1,369
    The grossed up amount of pension contributions (and gross amount of gift-aided charity donations) is deducted from the income to give the adjusted net income. If the adjusted net income is over £100,000 your personal allowance is clawed back by £1 for every £2 over £100,000.
    You will most likely need do the calculations for higher earners where pension contributions reduce the adjusted net income so they can have a full personal allowance.
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