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HMRC internal manual

PAYE Manual

HM Revenue & Customs
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Coding: coding allowances and reliefs: registered pension schemes

Basic rate relief for member contributions into registered pension schemes is usually given at source.

You will only need to give coding relief where the individual is liable to tax at a higher rate. The allowance gives relief for the difference between the basic and the highest rate at which the individual is liable.

Use the description Personal Pension Relief (PPR).

Note: Where the Scottish Rate of Income Tax applies, NPS will use the Scottish tax rates for Scottish taxpayers at higher or additional rate to calculate the relief.

Guidance on tax relief on member pension contributions is contained in the Pensions Tax Manual starting at PTM044200.

You do not need to give further relief for payments deducted from an individual’s pay before it is taxed (net pay arrangements). If payments to an employer’s occupational pension scheme are deducted from an individual’s pay before it is taxed then the full amount of tax relief will already have been given.