yes its taken a while to work it out as even after 50 years working in accounts ive never come accross this before. found the hmrc calculatoer which is quite good. effectively the k65x means they add £54.92 to my gross pension and calculate the tax due on all of it then deduct that amount of tax from the gross pension so my 926 goes down to 730 whereas previously net it was 909. as you say i will have to watch what they do in april each year as i have an inherited pension from the late wifes work and they use some of my tax code for that. all good fun getting old.