Tax Relief on AVCs

My wife and I have joint assesment for tax purposes and we pay tax at higher rate .I am paying AVCs on my income but am only allowed relief at lower rate could some one please explain why this is so because one of my main reasons for paying AVC s was to claim tax at the higher rate .Have I got the right thinking on this or is there some other explanation.Thanks again for all comments on AAM

Can you post some figures please - e.g. your gross, your wife's gross, your annual pension contributions, your wife's if applicable?

Your AVC will come off your taxable income, and where you are paying at top rate then this means you have less income taxable at top rate (i.e. 42% relief). I presume you are doing a tax return to claim the relief - a form for PRSI refunds recently went up on revenue.ie - check the Whats New section.

To play with the numbers you could pop in to any Revenue office and get a ROS CD (its free), then download the Form 11 for 2005 and away you go calculating your income tax - you can mess around with this to prove to yourself that you should be getting top rate relief.

To actually file this way you need to go through registration steps which take a few days - also by filing a Form 11 you are making yourself out to be a "chargeable person" - i.e. someone who is obliged to make a return. There should (you'd expect anyway!) be a Form 12 (for PAYE workers) up on ROS by next October. However, theres nothing to stop you just using the Form 11 as an accurate tax calculator - you dont HAVE to register etc. etc. just because you get the CD and download Form 11.

Have revenue also increase the SRCOP?

Revenue do a funny with your credits and SRCOP. I think they increase the credits by the amount of the contribution @ 20% - this allowes the contribution at 20% and increases the SRCOP by the amount of contribution you make subject to the max allowed. It works out the same but you need to check revenue figures at a number of mistakes have been made this year.
If this does not make sense I will try to explain in more detail.

Thanks for all replys I think BetsyOg has explained it for me now in that pension comes off the top of salary and if I was not paying AVCS I ( we would) be paying more tax at the higher rate (joint assesment) ,so this reduces the amount of higher rate tax we would pay on joint income.Have I got the right thinking on the position now .All opinions welcome