Pension contributions to reduce tax band

I'm self employed so my income is received gross (I pay tax via self assessment). I make personal pension contributions and I am wondering if they will bring my effective tax rate down from higher rate tax to basic rate tax. In order to calculate what level of pension contributions would have this effect, is the relevant amount of pension contribution the amount I pay in (before tax relief is applied) or the gross amount once my pension provider has added tax relief? If my pension contributions mean that I do not pay any tax at higher rate, will my Personal Savings Allowance be £500 or £1000?

Hi ,
 

Please refer to :  Tax on your private pension contributions  .

Thank you .

Great questions by Sarah B. I've read the guidance on the link above 'Tax on your private pension contributions', but it does not answer Sarah's final question which I also need to know: 'If my pension contributions mean that I do not pay any tax at higher rate, will my Personal Savings Allowance be £500 or £1000?' Thank you.

Hi ,
 

Your Personal Savings Allowance rate will be based on your Adjusted Net Income, so in this case, the rate would be £1000. Thank you .

Thank you, that really does help. I also can't find the answer to this part of the question using the guidance you linked to: 'In order to calculate what level of pension contributions would have this effect, is the relevant amount of pension contribution the amount I pay in (before tax relief is applied) or the gross amount once my pension provider has added tax relief?' So is the Adjusted Net Income reduced by the amount of the pension contribution paid in? Or is it reduced by the contribution plus the additional 25% tax relief added by the pension provider? Example £100 paid into pension, is topped up to £125 by the provider. The the Adjusted Net Income reduced by £100? or by £125?