Benefit in kind and annual allowance

As I have an ultra low emission salary sacrifice vehicle I am currently taxed on BIK value via PAYE which is less than half the actual monthly salary sacrifice deduction. For HMRC McCloud calculator I need to declare “taxable income” which includes benefits. Do I use P60 taxable income which already incorporates BIK or do I need to add full amount of deductions instead. Same question for calculating my “threshold income” and “adjusted income” for pension annual allowance charges. Thank you

Hi,

In all cases listed, use the P60 value, as the BIK is already accounted for via Salary Sacrifice. You can read more about ANI here:

Personal Allowances: adjusted net income

and threshold income here:

Work out your reduced (tapered) annual allowance

Thank you.

 

Thank you. So just to be clear, for AA purposes- threshold income definition from the link you provided says “Add any reduction of employment income for pension provision through any relevant salary sacrifice arrangements made after 8 July 2015.” I was presuming this included salary sacrifice for car lease? But you are saying that I can use P60 taxable income that has BIK added back in so I don’t need to add back the actual sacrificed salary amount which is higher than BIK?

Hi,
Please refer to guidance about adjusted net income using the link below:
Personal Allowances: adjusted net income
Thank you