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Self Assessment / Adjusted Net Income Help

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Hi looking for some help please as this is the first time I have been required to complete a self assessment.

My main confusion is around adjusted net income. According to my P60 my total pay for the year was £102,634.26. For the purposes of working out my 'adjusted net income' do I deduct the pension contributions which are deducted from my pay every month before tax? £375.55 is deducted every month, so £4,506.60 per year. So is my ANI £102,634.26 - £4,506.60 = £98,127.66.?

I thought this was correct, but having completed my self assessment, I am no longer sure.  The calculation states I owe c£591 in additional tax. On the calculation it states a reduced personal allowance balance of £11,263. I was under the impression that the personal allowance reduces £1 for every £2 where you adjusted net income is over £100,000, however I dont think my ANI is over £100k, no not sure why it is reduced? Saying that, I dont input my company pension contributions into the Self assessment, so not sure how it could ever be taken into account. 

Im really confused by this, apologies if I am missing something really obvious which is likely the case...
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  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    First Anniversary Photogenic Name Dropper First Post
    edited 30 December 2022 at 4:15PM
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    From what you say it would appear to me that your gross salary is £102634 plus £4506.60. Does this correspond to the ‘gross pay to date figure on your March 2022 payslip? The P60 shows salary after pension contributions and is what should be declared on your return. 
  • Flixton86
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    Thanks for the reply - the gross YTD pay on March payslip is £100,146.93.

    I was confused why this figure differed to the P60 figure, but I think the difference is mainly to do with my PMI benefit, which is £209.64 per month.
  • [Deleted User]
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    Flixton86 said:
    Thanks for the reply - the gross YTD pay on March payslip is £100,146.93.

    I was confused why this figure differed to the P60 figure, but I think the difference is mainly to do with my PMI benefit, which is £209.64 per month.
    Is that figure the gross pay for year to date or gross taxable pay year to date. There should be two figures.
  • Flixton86
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    It just shows Gross Pay (month and YTD), PAYE Tax, NIC and others (month and YTD) and Net Pay (month and YTD).
  • [Deleted User]
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    Flixton86 said:
    It just shows Gross Pay (month and YTD), PAYE Tax, NIC and others (month and YTD) and Net Pay (month and YTD).
    Fine - so P60 is correct. I think we need to establish the pension payment method. There is a regular poster who is pretty much an expert on that who will no doubt comment appropriately.
  • Flixton86
    Flixton86 Posts: 30 Forumite
    First Anniversary First Post Combo Breaker
    edited 1 January 2023 at 11:16PM
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    Hi - happy new year - is anyone able to help at all with this?

    i) am I correct in thinking my adjusted net income is <£100k, and if so ii) why has my personal allowance been reduced?

    My pension is a works pension with the contributions automatically deducted from pay before tax. I dont have a private pension. 

    Thanks
  • Dazed_and_C0nfused
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    Flixton86 said:
    Hi - happy new year - is anyone able to help at all with this?

    i) am I correct in thinking my adjusted net income is <£100k, and if so ii) why has my personal allowance been reduced?

    My pension is a works pension with the contributions automatically deducted from pay before tax. I dont have a private pension. 

    Thanks

    From what you have posted your ANI is >£100k and as such you have a reduced Personal Allowance.

    You cannot deduct your pension contributions when completing your Self Assessment return.

    This is because they are made under the "net pay" method i.e. your actual salary is say £106k but after deducting the pension contributions your taxable pay is only £102k.  So if you deducted them you would be double counting them. 

  • Flixton86
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    Thank you.

    I thought though that ANI is basically total taxable income?

    if my gross pay was c£100k, PMI BIK c£2k but of the c£100k gross I put c£4k into a company pension - isn’t my total taxable <£100k?

    Apologies if I am being a bit slow here...
  • Dazed_and_C0nfused
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    ANI is more complicated than total taxable income.

    You can't deduct "net pay" pension contributions when calculating your adjusted net income.

    In your original post you said
    "According to my P60 my total pay for the year was £102,634.26". That £102,634 is your starting point for ANI.

    Then you said
    "My pension is a works pension with the contributions automatically deducted from pay before tax. I dont have a private pension"

    So your pension contributions have already been deducted when arriving at the £102,634.  You cannot deduct them again a second time.
  • Flixton86
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    That’s  my confusion though - the £102,634 figure is the sum of my salary, bonus and PMi. Nothing has been deducted from it, I’ve checked.

    so if I deduct the c£4K pension contributions for purposes of ANI they are only deducted once, not twice.

    surely they have to be accounted for somewhere? I guess not as per your post which is very annoying!
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