Please help: adjusted net income dilemma

SammyOK

I have spent the last few days trying to figure out my adjusted net income but am finding the situation rather befuddling so will be immensely grateful for assistance please.

My current annual salary without any deductions is £55,750. My payslip shows a pre-tax monthly salary of £4645.83. Pension (salary exchange) of £446 is then deducted before the remaining £4,199.83 is subject to tax and national insurance.

Am I right in saying that my adjusted net income is the £4199.83 X 12 months, hence £50,397.96?

I'm trying to work this out to figure out if I am going to have pay the child benefit tax charge this year. So, if my calculation is right, can I avoid this by electing to have say an additional £50 (£600 for the year) added to my current pension salary sacrifice of £446.

Any help will be greatly appreciated. Thanks

unholyangel

Do you have any other income (interest from banks, dividends etc)? 

Are you sure it's salary sacrifice? If it were salary sacrifice, I would expect your salary to be the 50397, not 55750. 

SammyOK

unholyangel said:

Do you have any other income (interest from banks, dividends etc)? 

Are you sure it's salary sacrifice? If it were salary sacrifice, I would expect your salary to be the 50397, not 55750. 

No, I don't have any other income apart from my salary. 
Sorry for using the wrong term. My payslip states: USS - CRB by salary exchange -446. That's what I meant by 'salary sacrifice'. It's a deduction for my pension with the USS pension scheme. I work in higher education. 

pete1975

I had the same issue and i was struggling to get my head round it,   I also had a further problem that even if i dropped my salary to 50k and the remainder went to my pension then I still had over 7k worth of taxable benefits that put me above 50k again.   unfair really as my wife is a carer so doesnt work and yet several couples down the road have said they have both done this and still get child tax benefits because both wages are under 50k.

SammyOK

pete1975 said:

I had the same issue and i was struggling to get my head round it,   I also had a further problem that even if i dropped my salary to 50k and the remainder went to my pension then I still had over 7k worth of taxable benefits that put me above 50k again.   unfair really as my wife is a carer so doesnt work and yet several couples down the road have said they have both done this and still get child tax benefits because both wages are under 50k.

I think we're in the same boat! My partner is on a relatively low income too - under £12K

Jeremy535897

This is aimed at teachers rather than higher education, but might be worth a read.

https://www.litrg.org.uk/latest-news/news/190819-teachers%E2%80%99-employment-expenses-tax-relief-%E2%80%93-what-you-need-know

SammyOK

SammyOK said:

unholyangel said:

Do you have any other income (interest from banks, dividends etc)? 

Are you sure it's salary sacrifice? If it were salary sacrifice, I would expect your salary to be the 50397, not 55750. 

No, I don't have any other income apart from my salary. 
Sorry for using the wrong term. My payslip states: USS - CRB by salary exchange -446. That's what I meant by 'salary sacrifice'. It's a deduction for my pension with the USS pension scheme. I work in higher education. 

Are the two different...'salary exchange' and 'salary sacrifice'? They seem to be used interchangeably on various websites and that's added to the confusion. The main thing though is that my salary before tax is £55750, £446 of which is taken as pension contribution before the rest is taxed. Ta

greatkingrat

Actually it doesn't matter whether they are taken by salary sacrifice or not, either way your adjusted net income is £50398. 
Yes, if you increase your contributions by an extra £400 a year, you will not be subject to the child benefit charge.

SammyOK

greatkingrat said:

Actually it doesn't matter whether they are taken by salary sacrifice or not, either way your adjusted net income is £50398. 
Yes, if you increase your contributions by an extra £400 a year, you will not be subject to the child benefit charge.

Thank you so much for clarifying. I'll ask my pension scheme to request an extra £50 from my salary each month to cover this. I've spent the last few days trying to obtain this clarity and a lot of the information I've read has been rather vague.