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I have a question.
Why are gross relievable pension contributions not deducted from earnings/net income?
Question
Naveen has earnings of £ 68920 in 2023/24. He pays a personal pension contribution of £ 7,200 (net). He has no other taxable income.
Show Naveen’s tax liability.
68920 – 12570 = £ 56350. This is the taxable income.
Should not we deduct gross of 7200 (£ 9000) to arrive at taxable income as well?
Pension contributions are not shown on the IT comp unless taken gross from an employment income.
The gross pension is used to extend the BR and HR bandsWhy are they not shown? Are they not included within earnings and we have to exclude them?
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