Adjusted net income pension calculation

I am calculating my adjusted net income for the purposes of eligibility for childcare hours/tax free childcare. My workplace pension scheme has a very high pension contribution rate and I was under the impression these were deducted for the purposes of calculating adjusted net income. A call I had with HMRC this week said that this was not the case as tax relief had already been applied. I am unsure then why private pension contributions are eligible for deduction for adjusted net income as they would also be eligible for relief. As a worked example: Case A (pension paid as workplace pension scheme) Earn £100,000 Pension £10,000 Tax calculated on £90,000 Tax/NI £27,439 Net pay (in pocket) £62,561 Case B (opted out of workplace scheme but paying same amount into private pension) Earn £100,000 Tax calculated on £100,000 Tax/NI £31,439 Net pay £68,561 Pension paid £8,000 (relief at source tops up to £10,000) Higher rate tax relief £2,000 In pocket £62,561 So in both A and B, gross income is £100,000, pension pot is £10,000 and cash in pocket at the end is the same. But Case A would have an adjusted net income of £100,000 but Case B has an adjusted net income of £90,000. Can you explain why this discrepancy exists? Is there a reason to deter people from paying into workplace schemes?

Hi ,
 

If a workplace pension and the pension contributions are deducted from your wage before the tax is calculated then you already receive the tax relief at source. This will also be taken into account in your adjusted net income. Your income from your employment will be your gross income minus the pension contributions. Thank you .

So, to clarify, in both case A and B in my example above, adjusted net income would be £90,000?

Hi ,
 

Yes, both would be £90,000. Thank you .