Jimssen

Hi @HMRC Admin 2 - I think that may be a reference to the wrong guidance. PIM2058 seems to refer to the calculation of Adjusted Total Income for the purposes of s23 Income Tax Act 2007. That calculation is used to calculate liability for income tax. This thread is about adjusted net income, which is a different concept used to calculate eligibility for child benefit and childcare. The test is set out in s58 Income Tax Act 2007. So I think you have linked to the wrong guidance. Could you respond or edit your post to clarify please?

I'm trying to calculate my Adjusted Net Income for tax free childcare purposes. I'm looking at the guidance here: https://www.gov.uk/guidance/adjusted-net-income I have some income from UK property. The guidance says 'some rental income' should be included in the adjusted net income calculation. What figure should I include in my net income for the money from rental property? I assume the basic calculation will be income less allowable expenses. But how does the tax relief for residential property finance costs ( https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies ) feed into my adjusted net income? Should I take finance costs off my income, and if so then in what stage of the adjusted net income calculation?

I'm trying to calculate my Adjusted Net Income for tax free childcare purposes. I'm looking at the guidance here: https://www.gov.uk/guidance/adjusted-net-income I am a civil servant and pay contributions to Alpha, the civil service defined benefit pension scheme, and the Additional Contributions Scheme. These are taken from my pay before income tax is deducted. Do I deduct all these contributions from my total income in Stage 1, so my 'net income' would be my income minus all my pension contributions? I have also paid some contributions under the Cycle to Work Scheme, which were also taken from my pay before income tax was deducted. As these were also subject to tax relief, should I take these contributions off my 'net income' at stage 1? I also have income from UK property. The guidance says 'some rental income' should be included. What figure should I include in my net income for the money from rental property? I assume the basic calculation income less allowable expenses. But how does the tax relief for residential property finance costs ( https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies ) feed into my adjusted net income? Should I take finance costs off my income, and if so then in what stage of the adjusted net income calculation? Thank you for your advice!