SIPP Contribution / Net Adjusted Income £100k Childcare Limit / Higher Rate

For a person that needs to keep their “adjusted net income” below £100,000 because of “tax free childcare”, please could someone from HMRC confirm the following interpretation of the rules? The online guidance is not totally clear for higher rate taxpayers. For example, if PAYE gross taxable salary is £120,000 and this person has a SIPP, which of these options are correct for a Higher Rate Taxpayer? [OPTION 1] +£120,000 PAYE Gross Salary - £16,000 Less contribution into SIPP from personal bank account (net of tax) -£4,000 Less BASIC rate tax relief on SIPP contribution (20% of £20k gross addition to SIPP) -------------------- £100,000 Net Adjusted Income [OPTION 2] +£120,000 PAYE Gross Salary - £12,000 Less contribution into SIPP from personal bank account (net of tax) -£8,000 Less HIGHER rate tax relief on SIPP contribution (40% of £20k gross addition to SIPP) -------------------- £100,000 Net Adjusted Income Many thanks

Bumping post ahead of tax year end. Many thanks

Having spent 1 hour 40 minutes on the phone with HMRC today, speaking to 4 different people who were unable to confirm the above - before HMRC ended the call - please could someone respond to this query. Thanks

Hi Stuart James

Option 1 - a 16,000 SIPP contribution would be grossed up to provide 20,000 relief.

Thank you