Adjusted Net Income (ANI) is your gross income minus pension contributions and Gift Aid donations. It is the single number HMRC uses to determine which tax thresholds apply to you — personal allowance, child benefit, childcare, and more. It is not the same as your taxable income or your take-home pay.
Works for any one-off payment — end-of-year bonus, monthly commission, or spot award. The question is always the same: take it as cash (and lose a large slice to tax), or sacrifice it to pension (and keep every penny growing tax-free).
The rate of income tax + NI on each additional £1 earned. Student loan repayments are not shown — if applicable, add ~9% to your band. The personal allowance taper creates the notorious trap between £100k–£125k — where your effective marginal rate exceeds that of the additional rate band above it.
You can carry forward up to 3 years of unused pension annual allowance — potentially letting you contribute far more than the standard £60,000 this year. This is especially powerful if you have recently moved into higher earnings and have years of low contributions behind you. Rules: you must exhaust this year's £60,000 first, you must have been an active pension scheme member in each carry-forward year, and your total contributions cannot exceed your earnings for the year.
| Tax year | Annual allowance | Total contributions (you + employer) | Unused AA | Member? |
|---|---|---|---|---|
| 2023/24 | £60,000 | £60,000 | ||
| 2024/25 | £60,000 | £60,000 | ||
| 2025/26 | £60,000 | £60,000 |
Include all pension contributions: salary sacrifice + SIPP + employer contributions. Must have been an active scheme member to carry forward from that year.
Most people assume the pension annual allowance is always £60,000. It is not — if your adjusted income (salary + bonus + all pension contributions including employer's) exceeds £260,000, HMRC reduces your allowance by £1 for every £2 above that line, down to a floor of £10,000. Contributing above your tapered allowance triggers a tax charge at your marginal rate. Check your position below before making any large pension contributions.
The taper uses adjusted income (your income including employer pension contributions) — not ANI. Enter your employer's total pension contributions below.
Pension is the most powerful ANI lever — but not the only one. Every reduction below reduces your adjusted net income £-for-£, just like pension contributions. Stack them to hit a target threshold.
Pension and ISA are both tax-efficient — but in opposite ways. Pension: HMRC tops up every contribution (basic rate taxpayer puts in £800, £1,000 enters the pension). Higher rate taxpayers get even more. ISA: no upfront boost, but everything inside grows and withdraws completely tax-free, with no lock-in. The right answer depends on your marginal rate now versus what you expect in retirement — and how much you value accessibility.
HMRC doesn't always tell you that you need to file a Self Assessment tax return — but the penalties for missing the deadline are real (£100 immediately, rising to £900+ after 12 months). Answer the questions below to check your position.