Adjusted Net Income/Salary Sacrifice Pension

RandB2022

All.

I need to keep my adjusted net income below £100k to access tax free childcare and 30 hours. I've read previous posts and HMRC but am still really confused about adjusted net income- in particular the grossed up pension deduction because I make this via salary sacrifice, therefore surely I don't take anything else off as essentially I've had the tax relief already?

My Annual Salary is £128,000, I salary sacrifice £4,721 for travel insurance and additional leave (via flexible benefits scheme), I make pension contributions via salary sacrifice of £34,800.

According to the information on HMRC

1. Workout your net income. For me is this the 128,000 - 4,721 - 34,800?

"Take off any tax reliefs

 that apply like:

• payments made gross to pension schemes

   - those that have been made without tax relief"

Surely I don't take off any further tax relief as this has been access via the salary sacrifice already?

My calculation is that therefore my adjusted net income is 88,478

Thanks in advance.

Dazed_and_C0nfused

You cannot deduct salary sacrifice pension contributions from your adjusted net income.

Your P60 reflects your taxable pay and sacrificed income won't be included as you agreed to give it up.

RandB2022

Thanks. That's really helpful- so essentially if my pension is done via salary sacrifice and therefore my overall taxable pay is reduced there is nothing further (no grossing up etc) to do?

Dazed_and_C0nfused

Correct. 

Salary sacrifice is incredibly simple.

You don't get any pension tax relief and you never need to include anything on a Self Assessment return.

You are agreeing to a reduced salary in return for your employer paying more into your pension, hence there not being any pension tax relief due.