S/E, which year’s notional Tax & Ni ?

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    Hello All,

    Just a quick question i’d be greatful of help with.

    Customer is self employed- provides his S/E accounts for 2005/06. His claim for benefit is made in Nov 06.

    Do i apply the tax and NI rates for 2005/06 (to correspond with his accounts), or 2006/07 as his claim is made in 2006/07??

    I would always go with the later, but i have a nagging doubt that some issue was raised recently about this- and i cant find anyhting about it….im beginning to think i have just imagined it!!!.

    Can anyone confirm which is correct, and, if anything has changed can you point me to the circular etc??


    Kevin D

    The rate(s) of tax/NI to be applied should correspond with the accounts (i.e. the “assessment period”).

    [b:604cf84f5c]HBR 39(1)[/b:604cf84f5c] applies.


    HB Reg 39(1) now says to use the rate “applicable to the assessment period” (i.e. 2005/6 in your case). The old form of this regulation used to say that the rates to apply were those “in the year of assessment in which the claim was made”. It was changed by SI2005/2894 from 10th November 2005.


    Great – Thanks Kevin D,

    Do you know if it has changed to this relatively recently??


    I recently contacted the Adelphi about this, because the Regs are different from the guidance.

    The reply was to apply the tax and NI applicable for the assessment period (of the accounts)

    Hope this helps 😀 😀


    Regulation HB 2006 39(1) now says we must work out Tax and NI “[i:f9a390a4ae]applicable to the assessment period[/i:f9a390a4ae]”.

    This rule changed in November 2005.



    What was HB reg 32 originally prescribed that notional tax should be based on the tax rate of the year the claim was made. Then benefit periods were abolished and DWP didn’t notice that notional tax would continue to be based on tax rates that got more ancient with each passing year.

    I know the matter was raised at Adelphi in 2004. It took ’til November 2005 to get the regulation changed. That and loads of other stuff that mentioned the words “review” or “date of claim”.


    Great- thanks for all your replies.


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