Income calculation/ child benefit net adjusted income / tax band

incentive

Can I check my calculations with you as below and ask a couple of things re terminology around income please . 

I am self employed sole trader.

Business income (invoices- expenses) = £90000

bank interest £900 (do I get £500 tax allowance  so £400 taxable? 

No other income =Complete gross £90400?

Sipp I paid in £30000. Now has had tax relief put in £7500 . Grossed up pension = £37500

Gift aid 
net from sales£17.68 , charity claimed £4.42 in gift aid =£22.10 gross gift aid?

so for adjusted net income ( the figure I need to use re child allowance) 
£90400- £37500- £22.10
= £52,877.90??

is that correct please ? 

Also “Earnings” brackets for  personal allowance  what is that figure for me please? Is it my gross income £90400 or the amount after grossed up pension and gift aid please??

Thanks so much 🙏

[Deleted User]

I believe that you include all of the bank interest to arrive at your adjusted net income. Taxable income is a different concept. £53377 is your adjusted net income for child benefit purposes.

The earnings bracket for personal allowances is not a phrase I am familiar with. The adjusted net income is also used to determine to what personal allowance you are entitled - in your case 12570 - no restriction. 

https://www.gov.uk/guidance/adjusted-net-income

Dazed_and_C0nfused

bank interest £900 (do I get £500 tax allowance so £400 taxable? 

There is no separate allowance for interest, the full £900 will be taxed.  The first £500 at the savings nil rate of 0% though.

The full £900 is included in your adjusted net income (used for HICBC purposes).

incentive

thanks 

Just for terminology understanding

If I was an employee with employers pension etc and if I had a wage slip is the PAY * ( use this figure for your tax return ) the equivalent of my of my gross income - gross pension figure please? Ie £90000-£37500 =£52,500

Then for adjusted net income you remove  gift aid and add bank interest =£53377

And personal allowance brackets use Earnings / gross income?  Or Adjusted net come ?? 

If either I seem to fall in the one below - so this makes me in the higher rate band.

Higher rate	£50,271 to £125,140	40%

If my £53377 Adjusted net income ? was 
over £100,000- is that right?? 

Then this would apply- “Your Personal Allowance goes down by £1 for every £2 that your adjusted net incomeis above £100,000. This means your allowance is zero if your income is £125,140 or above.

thanks 

[Deleted User]

incentive said:

thanks 

Just for terminology understanding

If I was an employee with employers pension etc and if I had a wage slip is the PAY * ( use this figure for your tax return ) the equivalent of my of my gross income - gross pension figure please? Ie £90000-£37500 =£52,500

Then for adjusted net income you remove  gift aid and add bank interest =£53377

And personal allowance brackets use Earnings / gross income?  Or Adjusted net come ?? 

If either I seem to fall in the one below - so this makes me in the higher rate band.

Higher rate	£50,271 to £125,140	40%

If my £53377 Adjusted net income ? was 
over £100,000- is that right?? 

Then this would apply- “Your Personal Allowance goes down by £1 for every £2 that your adjusted net incomeis above £100,000. This means your allowance is zero if your income is £125,140 or above.

thanks 

That’s more or less correct as, in your case, the taxable pay is your gross pay. However, this is not always the case. It is not ‘taxable pay’ which determines ANI.