Child benefit and Pension Contributions

From_St_Neots

Hi

Posting here as I cannot find a definitive answer online.

I am set to lose nearly all of my CBA due to level of salary. I have read that Pension contributions can be used to lower the Net Adjusted Income level. It is vague on whether Pension payments taking at source from Gross income count or if it is just additional payments made directly to the pension company from Net income.

I am in the NHS pension scheme if that makes any difference.

Many thanks in advance
FSN

MountainMan101

There is a calculator on the Direct Gov website (I used it an hour ago) and there are fields for Pension contribution from salary (which is presumably what you lose from you gross pay, not the "extra" that your employer pays in) and another field for other pension contributions not from salary which has the same effect in reducing the calculation and must mean contributions you make from your net pay (or savings).

purdyoaten

If you are in the NHS scheme, the important figure is the amount after pension contributions. Look on the right hand side of your latest payslip - the Gross Pay for tax purposes is the amount that you should be worried about.

zygurat789

From_St_Neots wrote: »

Hi

Posting here as I cannot find a definitive answer online.

I am set to lose nearly all of my CBA due to level of salary. I have read that Pension contributions can be used to lower the Net Adjusted Income level. It is vague on whether Pension payments taking at source from Gross income count or if it is just additional payments made directly to the pension company from Net income.

I am in the NHS pension scheme if that makes any difference.

Many thanks in advance
FSN

Isn't the net adjusted income level the same as taxable income?

From_St_Neots

purdyoaten wrote: »

If you are in the NHS scheme, the important figure is the amount after pension contributions. Look on the right hand side of your latest payslip - the Gross Pay for tax purposes is the amount that you should be worried about.

I assume you mean the Gross value before the pension contributions are taken?

zygurat789

From_St_Neots wrote: »

I assume you mean the Gross value before the pension contributions are taken?

Absolutely not

From_St_Neots

zygurat789 wrote: »

Isn't the net adjusted income level the same as taxable income?

Not sure, as the guidance from HMRC gives examples on what you can use to lower NAI for the purpose of calculating whether some or all of CBA is to be paid back.

To say I am confused is an understatement.

From_St_Neots

zygurat789 wrote: »

Absolutely not

So if for example my Gross pay is £55,000 and I make NHS pension contributions of £5,001 out of my Gross untaxed £55,000 at source (i.e. Payroll process this) does this mean I am not liable for the CBA charge?

purdyoaten

From_St_Neots wrote: »

I assume you mean the Gross value before the pension contributions are taken?

just to confirm what zygurat789 said - I mean as I said - AFTER pension contributions.

purdyoaten

From_St_Neots wrote: »

So if for example my Gross pay is £55,000 and I make NHS pension contributions of £5,001 out of my Gross untaxed £55,000 at source (i.e. Payroll process this) does this mean I am not liable for the CBA charge?

Yep! because your gross pay is £55000. Your gross pay for tax purposes is £49999.

From_St_Neots

Thanks purdyoaten, you have just made me extremely happy.