BarberWindow

To elaborate on the above, you may want to see if your employer offers a salary sacrifice scheme. In your circumstances, this might bring your net adjusted income below the £100k threshold. A salary sacrifice scheme refers to how contributions are made to your pension scheme. Broadly, you and your employer: (1) agree to reduce your gross income by the amount of your employee pension contributions, and (2) the employer pays the total pension contribution in the scheme (i.e. what would previously have been both the employee and employer pension contribution). I’ll use a slightly simpler set of numbers and circumstances for an example, say you’re currently making your employee pension contribution as 3% of your total gross income of £100k, and the employer is making their contribution of 5% of £100k. Instead, you and your employer might agree to a gross salary of £92k with employer pension contributions of £8k. Note, pension contributions will be calculated based on a ‘pensionable salary’ - ‘pensionable salary’ may differ from your gross salary. Salary sacrifice can also be beneficial by reducing the amount of tax paid on pension contributions when they go into the pension scheme, plus employees and employees may pay less NI as it’s calculated on this new agreed lower salary. There are pros and cons to salary sacrifice arrangements, and they can have knock on effects to other benefits based on salary (e.g. maternity pay) - so it’s worth fully exploring what the implications may have for you now and in the foreseeable future. Finally I’d note, you can also consider charitable donations to reduce your net adjusted income.