SIPP Contribution

Davieboy24

Hi, I am looking to make a SIPP contribution this month to reduce my adjustable net income to below £100k. Is the logic of the following calculations correct to reduce below £100k?
Total Gross Salary = £110,822
Total Gross plus P11D benefits (healthcare) = £111,776
Less Pension Contributions via Employer Salary Sacrifice = £3,714 (personal contribution only, company provides additional contribution that I have disregarded)
Adjustable Net Income = £108,061
Total March 2020 SIPP contribution required = £108,061 - £99,999 = £8,062
Therefore to reduce Adjustable Net Income to £99,999, I would need to make a SIPP transfer of £6,450 (£8,062*0.8) in the coming weeks? 
I will then receive a further £1,613 (£8,062*0.2) rebate via my self assessment for the remaining 20%. 
Thanks  

Dazed_and_C0nfused

You would make life simpler by ignoring the salary sacrifice contribution as you aren't making this your employer is and as such you are not due any tax relief on it and it is not part of your tax liability calculation.

The reality is you just have salary of £107,108.  Presumably this is what you expect your P60 to show as your taxable pay for the year?

Do you not have any other taxable income?  No savings interest (current account?) or dividend income?

If not then the gross contribution of £8,062 would reduce your adjusted net income to £100,000 not £99,999 but you would still retain your full Personal Allowance.
NB. £111,776 - £110,822 = £954 + £107,108 = £108,062.

The gross relief at source contribution of £8,062 increases your basic rate tax band from £37,500 to £45,562 so you pay 20% tax on an additional £8,062 of your income rather than 40%.  But you are also saving your Personal Allowance, without the SIPP contribution you would have lost £4,031 of your Personal Allowance.

Overall this will make a 60% tax saving, 20% into your pension fund and 40% by saving your Personal Allowance and reduced higher rate tax liability.  So it's more like a personal tax saving of c£3.2k.

Davieboy24

Thanks for the response. 

Noted on disregarding the salary sacrifice piece, I'll will work from the expected P60 value.

No other divident income or savings as we have our savings within an offset mortgage account, however I'd query whether Santander 123 earnings counts as "income", I don't think it does but worth asking? 

So in order to reduce my adjusted net income to £99,999, I need to make a payment of £6,450.40 (£8,063*0.8) before the end of the tax year? 

Thanks

Dazed_and_C0nfused

A minor point but not sure why you want to get it down to £99,999?

Tapering of the Personal Allowance only starts at £100,002.

If it is a relief at source pension then yes you only pay 80% of the gross contribution.  The pension company add the basic rate tax relief to get you to the gross contribution.

Santander 123 interest is taxable cashback isn't.

Davieboy24

Reason is due to the significant childcare costs for 2 kids, therefore pension contribution to retain tax free childcare and 30hrs funding as this is based on an under £100k adjusted net income. 
Thanks for the input, all clear now.