Adjusted Net Income query

[Hussein-z3ksd]

Hi,

Im trying to work out my Adjusted Net Income - i know that Pension payments and Gift Aid donations are deductible however im unsure about the WFH tax relief.

Is the Working from Home tax relief @ £6/week deducted from the income to give the Adjusted Net Income or is it not part of the calculation?

Cheers

[Eric Mc]

As defined by whom and for what purpose?

[Hussein-z3ksd]

As defined by HMRC (i guess - im no expert) and for the purposes of working out adjusted net income.

[Eric Mc]

There are all sorts of titles for income depending on what the bottom line figure is being used for and what organisation is going to make use of the figure.

For a person who is paid under the PAYE system (i.e. not receiving income as a sole trader/partner in partnership etc) Net Adjusted Income for HMRC would be GROSS salary less any contributions to a pension fund and/or donations to registered charities).

[Hussein-z3ksd]

Eric Mc said:

There are all sorts of titles for income depending on what the bottom line figure is being used for and what organisation is going to make use of the figure.

For a person who is paid under the PAYE system (i.e. not receiving income as a sole trader/partner in partnership etc) Net Adjusted Income for HMRC would be GROSS salary less any contributions to a pension fund and/or donations to registered charities).

Ah ok, now im with you, its for a PAYE employee. From your response im assuming you cannot deduct the WFH tax relief to arrive at your adjusted net income (only pension contributions and gift aid donations).

thanks for your help :-)

[Eric Mc]

The Working From Home relief for employees isn't generally a large amount ads HMRC tends to restrict it for employees. It certainly WOULD be deducted for a self employed individual as it is looked on as a legitimate business related expense before arriving at taxable net profit.

The rules for claiming relief for costs incurred whilst working from home are much stricter for an employee compared to a sole trader.

[Hussein-z3ksd]

Eric Mc said:

The Working From Home relief for employees isn't generally a large amount ads HMRC tends to restrict it for employees. It certainly WOULD be deducted for a self employed individual as it is looked on as a legitimate business related expense before arriving at taxable net profit.

The rules for claiming relief for costs incurred whilst working from home are much stricter for an employee compared to a sole trader.

hypothetical question, same scenario as a PAYE employee calculating adjusted net income but additionally had rental income that would go towards their total income - would the WFH tax relief be deductible when calculating adjusted net income?

[Eric Mc]

Ask the entity who require the information - as they may have their own take on what they want to see deducted or not.