Adjusted Net Income

Your adjusted net income is essentially your total taxable income after accounting for certain deductions. This includes income from various sources such as wages, dividends, rental income, and freelance work. To calculate your adjusted net income, you deduct amounts such as pension contributions and charitable donations made through Gift Aid from your total taxable income.

Your adjusted net income actually determines the amount of Personal Allowance you’re eligible for. Specifically, as your adjusted net income increases beyond £100,000, your Personal Allowance decreases progressively until it is completely phased out. For more information about Tax Rates, see Additional Tax Rates.

Deductions that are subtracted from your total income to arrive at your adjusted net income include tax reliefs such as those for pension contributions and Gift Aid charitable donations. These deductions play a crucial role in determining your tax obligations and eligibility for certain tax-related benefits.

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