In question 94 of the BPP Kit, when calculating the employment income why is the contribution by the employee towards an occupational pension scheme deducted from the employment income? I mean it extends the rate bands but why are we deducting it from the employment income?
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Employment Income and Pension contribution
Becasue that's how it works - thus giving the employee tax relief at all levels
Okay so the tax bands are extended by both contributions by an employee into the personal and occupational pension schemes? And when an employer does it for both personal and occupational pension schemes it is an exempt benefit? To be honest, pensions is the most confusing topic to me in the whole syllabus haha.
No the tax bands are extended by the employees contribution
The employer contribution is an exempt benefit
Yes pensions are confusing but I have tried to make the notes as simple as possible. Practice the information with exam style questions if that helps
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