What is Adjusted Net Income? UK Definition 2026/27
Quick Answer
Your total taxable income minus specific deductions, used to calculate allowance tapers.
Definition of Adjusted Net Income
Adjusted Net Income (ANI) is a specific calculation used by HMRC to determine eligibility for certain allowances and tax charges. It's your total taxable income minus pension contributions (gross), Gift Aid donations (grossed up), and trading losses.
ANI is particularly important for the Personal Allowance taper (reduces above £100,000), the High Income Child Benefit Charge (starts at £60,000), and pension Annual Allowance taper (starts at £260,000 adjusted income).
Understanding your ANI allows you to make strategic decisions about pension contributions and charitable giving to stay below key thresholds and avoid losing valuable allowances.
Adjusted Net Income — Key Facts for 2026/27
| PA Taper Starts | £100,000 ANI |
| PA Gone Completely | £125,140 ANI |
| Child Benefit Charge Starts | £60,000 ANI |
| Pension AA Taper | £260,000 threshold income |
How Adjusted Net Income Works — Example
- 1Gross salary: £110,000
- 2Pension contribution: £10,000 (gross)
- 3Gift Aid donation: £1,000 (grossed up to £1,250)
- 4Adjusted Net Income: £110,000 - £10,000 - £1,250 = £98,750
- 5Result: ANI below £100,000, so full Personal Allowance retained
- 6Tax saving: £5,028 (retained £12,570 × 40%)
How Adjusted Net Income Affects Your Tax
Strategic management of your ANI can save thousands in tax. Bringing ANI below £100,000 restores your full Personal Allowance (worth up to £5,028 in 2026/27). Bringing ANI below £60,000 eliminates the High Income Child Benefit Charge if you receive Child Benefit. Pension contributions are the most effective tool as they reduce ANI pound for pound.
Official HMRC Guidance on Adjusted Net Income
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: Work out your adjusted net incomeFrequently Asked Questions about Adjusted Net Income
Related Tax Terms
Personal Allowance
The amount you can earn tax-free each year - £12,570 for 2026/27.
High Income Child Benefit Charge
A tax charge that claws back child benefit when a parent earns over £60,000.
Gift Aid
A scheme allowing charities to claim 25p extra for every £1 you donate.
Income Tax
Tax paid on your earnings, pensions, and other income at 20%, 40%, or 45%.
Marginal Tax Rate
The tax rate you pay on your next pound of income.
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.