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Posted Wed, 29 Mar 2023 21:00:18 GMT by mturner-87
Hi, Please can you clarify if I have a salary through employment of £100,000 and make £10,000 pension contributions via salary sacrifice into the company pension scheme, does that make my adjusted net income £90,000? Thanks
Posted Thu, 06 Apr 2023 10:47:17 GMT by HMRC Admin 32

You cannot deduct salary sacrifice pension contributions from your adjusted net income.

Your P60 reflects your taxable pay and sacrificed income won't be included as you agreed to give it up.

Thank you.
Posted Thu, 06 Apr 2023 11:02:20 GMT by mturner-87
Thank you. So in this instance, assuming no other income or reliefs, the value on the P60 would be £90,000 and this would be the adjusted net income used in consideration of tax free childcare?
Posted Thu, 06 Apr 2023 21:37:11 GMT by sportyfae
@mturner-87 You are overcomplicating life. As @HMRC Admin 32 explains you cannot deduct salary sacrifice pension contributions. This is because you haven't paid them, they are employER contributions. But you are missing a key fact here. Your starting point for adjusted net income is your taxable pay. Which would be £90,000 in the scenario you outlined. Not £100,000.
Posted Mon, 17 Apr 2023 08:49:56 GMT by HMRC Admin 19
Hi mturner-87,

For confirmation if this is correct for tax free childcare please contact our Childcare Service team. 

Childcare Service helpline

Thank you.

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