Questions on HICBC / Adjusted Net Income

DiscoveryMan

Hi all,

I'm looking at the rules for Higher Income Child Benefit Charge (HICBC), which effectively claws back Child Benefit for adjusted net income above 50k-60k. My quoted salary is around £60k, so looking to input money into my pension to avoid this charge back, however I would appreciate some help with the calculations & terminology. 

I have acknowledged I will need to complete a Self Assessment tax return, which I have not had to do previously

I understand the Adjusted Net Income is based on taxable pay minus pensions contributions. My payslip shows Gross Pay/Taxable Pay as the same value which appear to be calculated based on my quoted salary minus my pension contribution.
I do not have any other income, other than some interest on savings accounts which I understand counts as "Taxable Income"  

Therefore am I right in thinking if I keep the value of my "Taxable Pay + Savings Interest" below £50k, I will be able to avoid the HICBC charge? And to do this I can increase my pension contribution? 


Does it factor if my partner also earns above £50k?

Thank you in advance

Dazed_and_C0nfused

Only certain pension contributions can be deducted.

What method is used to get money into your pension?

Net pay
Relief at source
Salary sacrifice 

DiscoveryMan

Hi,
I believe it is Salary Sacrifice, with an additional contribution matched by my employer.
Thanks

Dazed_and_C0nfused

Salary sacrifice contributions are employer contributions so you definitely cannot deduct those when calculating your adjusted net income.

Although your starting point (taxable pay) is lower as a result of sacrificing some salary for those employer contributions.

If you deducted them you would be double counting them.

DiscoveryMan

OK, thank you. But for the calculation of the "Adjusted Net Income", that will be based on the "Taxable Pay" figure in my payslip? That if the value after the pension salary sacrifice as calculated by my employer.  

Dazed_and_C0nfused

DiscoveryMan said:

OK, thank you. But for the calculation of the "Adjusted Net Income", that will be based on the "Taxable Pay" figure in my payslip? That if the value after the pension salary sacrifice as calculated by my employer.  

That's the starting point yes.

[Deleted User]

On the final point in the first post - the same applies equally to the op’s partner.