Adjusted Net Income 29 September 2020 at 6:03PM in Benefits & tax credits 5 replies 503 views

MrNeville

Can anyone help, I’m really confused as to how I calculate my adjusted net income and concerned I’ve gone over the threshold for Child Benefit.  I believe it’s gross wage minus pension contributions, but added complication is that I have a company car, which is not salary sacrifice.  Do hypothetically, if I have a salary of £60,000, pension contributions of £6,000 a year, a company car which states a BIK of £330 on my payslip, but I pay £158 + £30 tax, how on earth do I work out net adjusted income, soooo confused

calcotti

See https://www.gov.uk/guidance/adjusted-net-income

i think it’s gross plus BIK minus pension (the gross amount)
£60,000 + £3,960 - £6,000 = £57,960.

unkle

See here;

https://www.gov.uk/guidance/adjusted-net-income

But yes employment benefits such as Co Car will apply. I believe it's the value on your P11D. Or are you saying you get a car allowance of £330 a month?

MrNeville

Can’t find my P11D at the moment. Car and Fuel BIK on payslip is states as £330 (this is just in the comments section).  I pay £158 plus £30 tax contribution towards car a month which I pay after tax

Dazed_and_C0nfused

You cannot deduct salary sacrifice pension contributions.

For two reasons, firstly you haven't actually contributed anything to the pension, your employer has.  Secondly your P60 will already reflect the reduced taxable pay so deducting them would mean you have double counted them.

Same goes for net pay contributions, which you do pay, but are already reflected on the P60 taxable pay amount.

calcotti

MrNeville said:

Can’t find my P11D at the moment. Car and Fuel BIK on payslip is states as £330 (this is just in the comments section).  I pay £158 plus £30 tax contribution towards car a month which I pay after tax

I assumed the £330 is the monthly BIK which is how I arrived at £3,960 for the full year,