Thank you. In that case I will make an additional private pension contribution without tax relief before end of this financial year to bring my net adjusted figure under £100k.
- I will make this additional contribution direct to my private pension (as opposed to being deducted from my pay by my employer). Do I need to declare this anywhere?
- Secondly, as I’m making the contribution without tax relief, do I add 20% when deducting from my taxable income? Eg If I pay in £900 to my private pension this would actually mean I deduct £1,080 from my taxable income to arrive at my adjusted net income for the year?
Sorry just realised this would leave my adjusted net income at £95k, not £96k if my calculations are correct. Look forward to hearing if this is right or not. Thanks.
Hello, looking for some guidance on calculating adjusting net income. My taxable income for the 2023/24 financial year is £101,000. This includes a deduction of £6,000 that my employer takes from my salary before tax.
Looking at guidance, I believe this means my adjusted net income for the year is £96,000 (therefore bringing me below the £100k threshold meaning I qualify for a number of chilcare support schemes).
However I want to check this is correct, because it feels like my pension contributions are deducted twice - once when calculating my taxable income (as my employer takes the contributions before tax) and then counted AGAIN as a deduction from my taxable income to work out my adjusted net income?
Can you advise? Thanks!