Pension deductions for Higher Benefit Charge calculation

Tulbagh

I am a teacher and now earn over £50,000 so assume I will have to pay the HIgher Income Child benefit charge. When I try to work out the exact amount I need to enter into the Child Benefit Tax Calculator, I am unsure whether to deduct my teacher pension contribution to calculate my taxable income. The child benefit tax calculator clearly states, when adding up your taxable income you should include

• your salary before tax (with pension contributions under net pay arrangements deducted)

and use your P60 details to guide you. Any help would be gratefully received as I am currently unable to find a definitive answer (even the Higher Benefit Charge Office gave me two different answers when I rang them on consecutive days). Thanks

Dazed_and_C0nfused

Assuming they are net pay deduction then no, you cannot deduct them.

They have already been deducted in arriving at your taxable pay so deducting them again would be double counting.

For example salary (which is irrelevant for tax purposes) £54,000 less 10% pension contribution = taxable pay of £48,600

You need to read up on Adjusted Net Income as this is what the High Income Child Benefit Charge is based on, not salary or taxable income.

Tulbagh

Thanks for that - I feel dazed and confused!

Dazed_and_C0nfused

Don't forget if you pay separate contributions to a personal pension or SIPP then these will be under the "relief at source" method and they can be deducted as part of your adjusted net income.

They don't reduce your taxable income though, they increase your basic rate tax band instead.