WHY so they do this? it just creates confusion for amateurs like me. Also,, If you are a higher rate taxpayer is the means by which HMRC refund you the additional HR TR by increasing your basic rate band on the SA form when you input the gross pension contribution..? Thanks all
HMRC really should attach a big red warning flag to all paye coding notices - advising they are reasonable estimates that may not always result in the correct amount of tax being collected.
The onus unfortunately is 100% you to go and do your research in this regard.
Sometimes its simply impossible for hmrc to predict the outcome - eg bod has two jobs and second one may or may not put them in higher rate tax. Or if there are estimates pension or expense claims in your tax code.
They have added to problems recently by moving bods to w1 codings with adjustment for prior year estimate - god knows who thought that was a sensible idea.
Ok back to your questions.
Also,, If you are a higher rate taxpayer is the means by which HMRC refund you the additional HR TR by increasing your basic rate band on the SA form when you input the gross pension contribution..?
Yes your basic rate band is extended when you (not your employer though !!) make pension contributions on which hmrc add 20% into the pot. This basic rate band is extended by the grossed up pension payment made - and will hopefully result in the extra 20% tax "reduction" for most bods with earnings below 100k but in fully in higher rate.