High income child benefit tax and pension contribution

[maxtax25]

Hi,

I am confused about the adjusted net income (ANI). I need help determining if I need to repay the child benefit or not.

I pay 12.5% NHS pension contributions on my payslip. ChatGPT says that this pension contribution cannot be used in the ANI calculation. It advised me to sum up my gross pay each month, and that's all. Is that correct?

My monthly gross salary for 24/25 is as follows:

April, May, June, July, August, September, October: £5897.42, total £41,281.94
November £6,566.58 + 6,466.32 (backdate pay rise since April 2024)
Dec to March £6,566.58

Overall total: £80,581.16

I had a £1,003.37 gross interest from savings.

Below is a snapshot of my March 25 payslip:

------------------------------------------------------|
Annual Salary £78,799 |
Taxable Pay today £70,445.64 |
Tax to date £15,606.40 |
______________________________________|
Gross pay | Deductions |
-------------------------|----------------------------|
MONTHLY 6,566.58 | TAX £1,250.47 |
| NIConEE £298.83 |
| NHS £820.82 |

Thank you in advance.

Max

[D&C]

You can normally only deduct "relief at source" pension contributions when calculating your adjusted net income.

Your contributions are made using the "net pay" method so you cannot deduct them.

If you look at your taxable pay value you will realise they have already been deducted when arriving at that amount. So if you deducted them when calculating your adjusted net income then that would be double counting them

You do need to include all taxable income so the full amount of any (non ISA) interest will be part of your adjusted net income.

[maxtax25]

Thank you very much.

[jackwilliam11]

Hey Max,

Good question — ANI can be really confusing!

In short: you can’t deduct NHS pension contributions when working out your Adjusted Net Income because they’re taken off before tax — your payslip’s “Taxable Pay to Date” (£70,445.64) already has those deducted.

So your ANI is roughly:
£70,445.64 (taxable pay) + £1,003.37 (savings interest) = £71,449.01.

That’s well below £50,000, so you won’t need to repay any Child Benefit.

You can double-check using HMRC’s calculator here:
https://www.gov.uk/child-benefit-tax-calculator

Hope that helps!