High Income Child Benefit Charge - torn between CS pension and SIPP

Dazed_and_C0nfused

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

Thrifter_2

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Dazed_and_C0nfused

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Maybe I've missed something in the earlier posts, I was assuming the thread was still about HICBC.

NIC'ble pay is of no relevance to HICBC.

It's adjusted net income which determines HICBC and you cannot deduct any pension contributions made using the net pay (or salary sacrifice) method when calculating that.

r6mile

Do you have your P60 yet? That will give you the clearest indication of your ANI (given you have no other sources of income).

Remember that the HICBC threshold has very thankfully been raised to 60k from next FY, so you may want to turn off your AVC contributions now (assuming your main goal was just to stay below the HICBC threshold)!

Thrifter_2

Dazed_and_C0nfused said:

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Maybe I've missed something in the earlier posts, I was assuming the thread was still about HICBC.

NIC'ble pay is of no relevance to HICBC.

It's adjusted net income which determines HICBC and you cannot deduct any pension contributions made using the net pay (or salary sacrifice) method when calculating that.

Are you sure about not being able to deduct any pension contributions? I'll be honest, I'm also confused. Reading the .Gov.UK i should take them off. See Step 3. Personal Allowances: adjusted net income - GOV.UK (www.gov.uk)

Thrifter_2

r6mile said:

Do you have your P60 yet? That will give you the clearest indication of your ANI (given you have no other sources of income).

Remember that the HICBC threshold has very thankfully been raised to 60k from next FY, so you may want to turn off your AVC contributions now (assuming your main goal was just to stay below the HICBC threshold)!

Thanks @r6mile, i hope you are keeping well. That was such a relief hearing that and i immediately thought about you when i heard about it! Finally, this injustice to single-earning households is being rectified, let's hope it stays that way!

I've already submitted a request to change, but will continue to make a small monthly contribution as reading your previous posts, I'm swayed in benefiting from a DB and DC pension option also.

I don't think I'll see my P60 for another couple of months - HR aren't the quickest where i work .

r6mile

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Maybe I've missed something in the earlier posts, I was assuming the thread was still about HICBC.

NIC'ble pay is of no relevance to HICBC.

It's adjusted net income which determines HICBC and you cannot deduct any pension contributions made using the net pay (or salary sacrifice) method when calculating that.

Are you sure about not being able to deduct any pension contributions? I'll be honest, I'm also confused. Reading the .Gov.UK i should take them off. See Step 3. Personal Allowances: adjusted net income - GOV.UK (www.gov.uk)

So in Civil Service terms, I think you were correct in your analysis that the “taxable pay” - showing 47k or so - to date is the relevant figure in terms of ANI. Gross earnings is your salary, before pension contributions (both Alpha and the CSAVC scheme). You’ve clearly “overshot”, in terms of trying to get below the HICBC threshold as you have ended up 3k below, which is no bad thing anyway as it’s all in your pension anyway. My March payslip is structured similarly.

Dazed_and_C0nfused

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Maybe I've missed something in the earlier posts, I was assuming the thread was still about HICBC.

NIC'ble pay is of no relevance to HICBC.

It's adjusted net income which determines HICBC and you cannot deduct any pension contributions made using the net pay (or salary sacrifice) method when calculating that.

Are you sure about not being able to deduct any pension contributions? I'll be honest, I'm also confused. Reading the .Gov.UK i should take them off. See Step 3. Personal Allowances: adjusted net income - GOV.UK (www.gov.uk)

You can deduct relief at source (RAS) pension contributions but not those made using the net pay method.  As these are deducted before an employer reports taxable pay you would be double counting them.  For example salary £50k less 10% net pay contribution = taxable pay of £45k.

Salary sacrifice contributions cannot be deducted as these are employer contributions so not relevant for adjusted net income.  You would of course have less taxable pay by virtue of sacrificing some salary but you cannot deduct these (employer) pension contributions when calculating ANI.

Thrifter_2

r6mile said:

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Dazed_and_C0nfused said:

Thrifter_2 said:

Update: Thanks for all your support with this. See below my latest pay slip for end of March 24.

 I'm still struggling to see whether i have come under the £50K limit for HICBC?

Am i right that my ANI will be approx £46.1K?

[based on calculation of £59.5K - (£3.8K Alpha) - (£8.9K AVC)] 

No one can know what your ANI will be from just a single source of income.  Or do you literally have no other taxable income of any sort?

Also, why isn't your starting point £46,796?

Not sure what relevance the £59.5k has for tax purposes 🤔

I thought it starts with NI-able pay 🤔🤔🤔

That's right, I have no other sources of income.

Thrifter_2

Maybe I've missed something in the earlier posts, I was assuming the thread was still about HICBC.

NIC'ble pay is of no relevance to HICBC.

It's adjusted net income which determines HICBC and you cannot deduct any pension contributions made using the net pay (or salary sacrifice) method when calculating that.

Are you sure about not being able to deduct any pension contributions? I'll be honest, I'm also confused. Reading the .Gov.UK i should take them off. See Step 3. Personal Allowances: adjusted net income - GOV.UK (www.gov.uk)

So in Civil Service terms, I think you were correct in your analysis that the “taxable pay” - showing 47k or so - to date is the relevant figure in terms of ANI. Gross earnings is your salary, before pension contributions (both Alpha and the CSAVC scheme). You’ve clearly “overshot”, in terms of trying to get below the HICBC threshold as you have ended up 3k below, which is no bad thing anyway as it’s all in your pension anyway. My March payslip is structured similarly.

Thanks r6mile, phew! - better to be under than over.  Thankfully won't be an issue for next year!

Thank you all so much for your support/help with this!