Child benifit - salary sacrifice- adjusted net income

I'm very confused. Do you adjust your net income by taking out the value of your salary sacrifice pension to get your adjusted net income? 

I've just spoken to someone at the tax office. Lovely man. And he said 99% of the time you should not be reducing your net income  based on your pension contributions. 

Say for argument you earn 51,000 per year. Of that 3,000 is taken per year as salary sacrifice, the company matches this so a total of 6000 is added to your pension pot. would your adjusted net income be 48,000 which is less the 3,000? 

I've read the page on here and also tried to understand the pages but now I'm confused as the chap on the phone at the tax office said I shouldn't take the contribution away from my salary to creat my adjusted net income?! Which to me is completely the opposite to whats on the various web pages. Including there own website. Unless I'm just understanding everything wrong?

Any help?


  • zagfles
    zagfles Posts: 20,197
    First Anniversary Name Dropper First Post Chutzpah Haggler
    Crossed wires.
    Remember the term used is "salary sacrifice". This means you have sacrified salary (in return for your employer paying it into your pension).
    If your was pay £51,000 before the sacrifice, and after the sacrifice it's £48,000, then £48,000 is your actual salary. That's what'll be on your P60, on your payslips, what HMRC will assess you on for tax and NI. 
    So the tax office guy is right. You don't deduct the pension contributions, because they are employer contributions. But instead you declare your actual salary, ie the £48k, which already has the sal sac deduted.
  • You cannot deduct employer pension contributions, which is what salary sacrifice results in, when determining your adjusted net income.

    In your example the starting point for ANI is the £48k of taxable earnings.
  • Hi @zagfles, @Dazed_and_C0nfused

    You have both made this so much clearer for me to understand. 

    Thank you so so much 
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