How to calculate adjusted net income

Hi V100

You will need to query this with the Childcare Service helpline to query the calculation that they apply.

You can contact them on 03001234097.

Thank you. 

Hi MHL,

It is based on the tax year.

Thank you.

Hi HMRC Admin 2, Do you mean the previous tax year or current? If previous, if my income has dropped significantly in the current tax year vs previous is there anything I can do to have my circumstances reviewed? On another note, when calculating adjusted net income are personal workplace pension contributions treated differently to employer workplace contributions? My understanding is that they are. For example if Jane earns £50k and pays £10k into her pension via salary sacrifice and her employer pays £5k into her pension, her adjusted net income would be £40k, right? Thanks.

Hi HMRC what is the adjusted net income figure in this example? Total Annual Taxable Income as per March payslip = 101,500 Payment into a Private Pension scheme : £4,000 direct payment (£5,000 20% Basic Rate gross up) Is the deduction £4k or £5 to give total adjusted net income of £97,500 or £96,500 ? Thanks Wonga78

Hi MHL,

It is always based on the current tax year.

The employer contributions are not included in the calculation. 

Thank you.


 

Hi,

It would be £96,500.

Thank you.

Hi HMRC “April 2024: Children two years and up will be entitled to 15 hours free childcare a week.” Question 1: what is meant by current tax year if you apply for the the 15 hours free child care . Is the current tax year when you forexample apply in March then 06-04-2024 / 05-04-2025? Or do you need to wait till the nex year tax year starts before applying. Reason for asking is i could decide to put my bonus (paid in December) into my pension scheme which will Lower my adjusted net income below 100k. I want to know when I need to start doing this. Question 2: are dividends in an ISA share account to be included in the calculation of the adjusted net income?

Hi,
You will need to query this with the Childcare Service helpline who deal with Tax Free Childcare on 0300 123 4097.
Dividends in an ISA are not included.
Thank you.
 

Hi, Please can you help me with my example. If Total Taxable Income is £97,500 and then a Bonus is paid in the same tax year for £10,000 taking total to £107,500: If I Bonus Sacrificed the £10,000 through my employer before tax into my pension, does that mean my adjusted net income is now £97,500? Thanks.

Hi luke_pool_85

Please see the following for Adjusted Net Income Personal Allowances: adjusted net income

Thank you