SE42450 - Emoluments from offices and employments: basis of assessment - assessments made after a change of practice - income to which the change of practice rule applies

Section 206 ICTA 1988

The special rule in Section 206 ICTA 1988 (see SE42440) applies to Schedule E income where both the following conditions are met. The income

• was taken into account under PAYE and
• was received not less than twelve months before the beginning of the year of assessment in which the assessment or self-assessment is made (the “assessing year”).

The rule applies to all Schedule E income, not just emoluments of employees. So it applies to pensions and Social Security payments chargeable under Schedule E (see SE74000 onwards and SE76000 onwards).

Income which has been taken into account under PAYE includes both payments from which tax has been deducted under PAYE and Schedule E income which has been coded out for convenience, for example benefits in kind or emoluments from a subsidiary employment.

As regards

• the operation of the change of practice rule, see SE42470
• the application of Section 206 ICTA 1988 to income which is exempt from tax, see SE42460.