HMRC 'update your estimated income'. Earning over £100k with salary sacrifice

sturgeon

This should be extremely simple but I am confused. The HMRC site once logged into my tax account allows me to estimate my income for the year.

Very basically, I am trying to pay enough into my pension via salary sacrifice so my income reduces to £100k specifically, to avoid the gradual loss of personal allowance.

For example, if earning £110k then I'd ensure my employer adjusts my pay so £833.33 goes into the pension monthly via salary sacrifice, meaning that £10k goes in to the pension and my taxable income is £100k.

Therefore, when the HMRC site asks me to update me 'estimated income', should I be putting in £100k? Regardless of me earning £110k and paying £10k in via salary sacrifice, £120k and paying in £20k via salary sacrifice, each result means my taxable income is £100k specifically?

Dazed_and_C0nfused

You are overcomplicating things.

Salary sacrifice means you aren't contributing to a pension, you are agreeing to a reduced salary in return for additional employer pension contributions.

HMRC are interested in the amount which will be shown on your P60 next April.

If that will be £100,000 then you would enter £100,000 as your estimated income (from that particular employment).

Don't forget that the Personal Allowance is based on your adjusted net income so if your total taxable income was say £101,000, comprising £100,000 earnings, £500 interest and £500 dividends and you don't contribute anything to a pension or make Gift Aid payments then your Personal Allowance would be reduced to £12,070 as your ANI would be £101,000.