Reconfirmation for Tax Free Childcare and 30 Hours Free Childcare: Adjusted Net Income

[RichmondMumof2]

Happy New Year,

I'm due to reconfirm eligibility for tax free childcare and 30 hours free childcare.

The guidance on the tax-free childcare page (www.gov.uk/tax-free-childcare) is If you or your partner have an expected ‘adjusted net income’ over £100,000 in the current tax year you will not be eligible. This includes any bonuses you expect to get. Your adjusted net income is your total taxable income before any personal allowances and minus things like Gift Aid.'

On the adjusted net income page (www.gov.uk/guidance/adjusted-net-income) the definition suggests that pension contributions and gift aid donations are included in the calculation of 'adjusted net income' and the examples given on the page include these deductions in steps 2 and 3 for pension contributions and gift aid donations.

So, I went to reconfirm and felt comfortable that I am eligible however the declaration screen suggests that pension contributions and gift aid donations are not included in the calculation of adjusted net income.

I've tried calling HMRC for clarification as there seems to conflicting guidance but the answer phone message states that they are very busy and not answering calls.

Does anyone know the answer here? The adjusted net income definitions appear to be in conflict.

I've just applied for tax free childcare and everything I read specifically states adjusted net income is amount after charity donations, pensions etc. I'd go with that as it is on the application so the only info most people would have

Thank you @MissLC. Great insight.

I had a call from HMRC to query my partners income in relation to tax free childcare specifically. I said his salary is over £100k but that his pension contributions bring his net adjusted income to below that. They accepted this and approved our claim.

I realise many will see this as a first world problem, but it does seem very unfair that the £100-125k tax bracket pay proportionately more tax than any other group and if you have children then going over £100k net adjusted income means forfeiting the tax free childcare and 30 hours. It makes a slight pay rise very costly.

Thank you @123walrus.

I've asked HMRC on their forum and they agree with you too.

The pension and gift aid donations are the adjustments.