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Posted Fri, 04 Nov 2022 17:45:34 GMT by sp352
I have found answers to the general calculation of ANI (https://www.gov.uk/guidance/adjusted-net-income) in this forum as related to assessing the £100k threshold in particular on how to deduct pension contributions, however I find no reference to the potential impact of certain benefits on the ANI calculation. Namely, there are certain benefits (e.g. Life assurance, critical illness, lifestyle) which are paid under salary sacrifice as they are exempt from income tax and NI contributions. On my payslip the "taxable gross" appears to deduct these benefits (as they are tax exempt). Question: 1) When assessing the ANI and taxable gross income, can/should these employer benefits under salary sacrifice be deducted from the income to calculate ANI?
Posted Wed, 09 Nov 2022 15:20:16 GMT by HMRC Admin 32
Hi,

When working out your adjusted net income, you do not include any pension payments made under net pay arrangements, these are deducted from salary before the employer provides PAYE and are ignored for the purposes of calculating adjusted net income.

Thank you.
Posted Wed, 09 Nov 2022 17:21:38 GMT by sp352
Many thanks for this reply however you have not addressed the specific question raised. The position on pension payments/benefits is very clear and well documented throughout this forum. My question as posed is specifically related to non-pension employer benefits such as those benefit examples given in the above post (salary sacrifice life assurance etc. which do not get included in the P60/payslip taxable gross income). As these are salary sacrifice can the gross taxable income be taken for ANI, or do these non-pension benefits need to be added to the gross taxable income to calculate the ANI?
Posted Mon, 14 Nov 2022 15:20:28 GMT by HMRC Admin 17

Hi,
 
Adjusted net income (ANI) is calculated as Total taxable income, minus gift aid donations, minus pension contributions
(grossed up where your provider has already given tax relief). 

Add back payments to trade unions or police organisations. 

There are some examples at:

Personal Allowances: adjusted net income .

  EIM21600 provides an alphabetised list of benefits and expenses payments:

Employment Income Manual  . 

You would need to review the list and apply it to the calculation method at the examples link.

Thank you.
 

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