Adjusted net income and tax free childcare

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in Cutting tax
Hello,
I'm trying to work out my 'adjusted net income' to see if I'm still eligible for tax free childcare this year. I've read the guidance at HMRC (gov.uk/guidance/adjusted-net-income) and googled it, but I still don't understand. I'm hoping someone can explain this in simple language to me!
Situation: I work for the NHS and have the standard NHS pension. We have a tax free childcare account. My income for this tax year (22-23) is hovering around £100k (my wife earns less). I will pay around £12k in pension contributions this year. I am not 100% sure, but I think contributions to the NHS pension scheme are before tax is taken off: NHS Pension Scheme members will receive tax relief on their pension contributions up to a certain amount. This is because contributions are taken from pay before tax is taken off, therefore contributions reduce the amount of pay subject to tax. )
Question: is my adjusted net income going to be £100k or £88k (or even £85k as 1.25 x £12k = £15k)?
Many thanks in advance & apologies for my ignorance!
I'm trying to work out my 'adjusted net income' to see if I'm still eligible for tax free childcare this year. I've read the guidance at HMRC (gov.uk/guidance/adjusted-net-income) and googled it, but I still don't understand. I'm hoping someone can explain this in simple language to me!
Situation: I work for the NHS and have the standard NHS pension. We have a tax free childcare account. My income for this tax year (22-23) is hovering around £100k (my wife earns less). I will pay around £12k in pension contributions this year. I am not 100% sure, but I think contributions to the NHS pension scheme are before tax is taken off: NHS Pension Scheme members will receive tax relief on their pension contributions up to a certain amount. This is because contributions are taken from pay before tax is taken off, therefore contributions reduce the amount of pay subject to tax. )
Question: is my adjusted net income going to be £100k or £88k (or even £85k as 1.25 x £12k = £15k)?
Many thanks in advance & apologies for my ignorance!
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Presumably your final payslip in March and P60 will both show taxable pay of £88,000 so that is your starting point.
Also there is no pension tax relief with net pay pension contributions, the tax benefit comes form not being taxed on your salary in the first place i.e. instead of being taxed on £100k you are only taxed on £88k.
It's relief at source contributions which get 25% added (20% of the gross contributions).
NB. If you have minimal other taxable income, say some interest or a few dividends then your pension contributions will actually have saved you from paying £4,800 in tax, effectively 40% personal saving for you.
My payslip states 'taxable pay' of £88k (this seems to equal 'total pay' minus 'pension contributions'), is this the same as 'adjusted net income'?
(I realise that additional taxable income has to be added, and gift aid can be deducted too).
I'm just trying to work out what my 'adjusted net income' will be, as I need to decide about increasing gift aid etc to avoid losing tax free childcare.
It is the starting point in calculating your adjusted net income.
Basically add up all your taxable income and deduct Gift Aid (the gross contribution) and the gross amount of any eligible pension contributions (doesn't seem applicable to you). Full details here.
https://www.gov.uk/guidance/adjusted-net-income
Just to make sure I've understood correctly, adjusted net income should be (assuming I have no other income):
Taxable income (i.e. gross pay minus NHS pension contributions) minus grossed gift aid
My main question was whether it was taxable income or gross income to use, but you've said the former - which is exactly the answer I was hoping to hear!
I spoke to the eligibility people at HMRC and they've specifically told me I CANNOT deduct my pension OR use my taxable pay in the calculation. They told me I have to use gross pay, and as the NHS pension is not a private fund, I can't deduct it.
My gross pay is over 100k, my taxable pay is under because my payslips don't include the pension contributions in the taxable pay.
Is anyone able to confirm categorically whether I'm eligible?!
(Ha sido divertido)
That's reassuring. Although now there's a recorded conversation whereby I'm told I can't reconfirm my eligibility in March. Can I just ignore him or do I call back and argue my case?!
Payslips show a) gross pay, b) taxable pay and c) pension where a=b+c and he was adamant that starting point was gross income...
How should I proceed?
Thanks again
E
From this site:
https://www.moneysavingexpert.com/family/tax-free-childcare/
(Ha sido divertido)