Glossary · UK

What is Adjusted Net Income?

Your total taxable income less grossed-up pension and Gift Aid contributions — used to test the Personal Allowance taper and HICBC.

Full Definition

Adjusted net income (ANI) is total taxable income from all sources (employment, self-employment, dividends, savings, rental, etc.) before Personal Allowance, minus certain reliefs — most importantly the grossed-up amount of any personal pension contributions made under relief at source, and the grossed-up value of Gift Aid donations. HMRC uses ANI rather than gross salary to decide two key tapers: the Personal Allowance reduction above £100,000 (the 60% effective-rate band running to £125,140) and the High Income Child Benefit Charge, which from 6 April 2024 applies between £60,000 and £80,000. Because pension and Gift Aid contributions reduce ANI, making them can claw back lost Personal Allowance or eliminate the HICBC entirely. Always gross up relief-at-source pension contributions by dividing the net amount by 0.8 before subtracting.