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Posted Mon, 11 Mar 2024 01:32:41 GMT by CuriousTaxPayer
Hello HMRC Community, I would like to understand how additional/voluntary pension contributions affect the Net Adjusted Income (and therefore the Personal Allowance): suppose my total income for the year is £110,000 (this includes income from employment, interest, dividends etc.). How much extra cash would I need to pay into my pension pot to reduce my Net Adjusted Income to £100,000 in order to keep my full Personal Allowance? £10K, £8K, another amount? I thought the answer was £8K (with additional 25% [£2K] being added 'by default' at the time of making the lump sum payment). However, the example on the HMRC website suggests £10K. ( - example B.) Thank you for your help!
Posted Fri, 15 Mar 2024 11:14:09 GMT by HMRC Admin 19

It is the grossed up pension contribution that is deducted for adjusted net income. In your example if it is £8000 net contributions, then the gross figure will be £10,000.

Thank you.
Posted Sat, 16 Mar 2024 11:27:11 GMT by CuriousTaxPayer
Thank you

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