31 July 2018

Notional offsetting – July 2018 update

Over the last year, we have been posting regular updates about HMRC’s notional offsetting policy following changes to policy announced in February 2017. Since then we have been seeking clarification on a number of points.

The Adjudicator published her 2018 report recently which addressed the issue of notional offsetting once again. The current position therefore seems to be that:

In all cases where HMRC are informed of a change in the adult composition of the household in the current year (which only affects the current year award) HMRC will automatically consider whether notional offsetting applies.
Where a household composition change is reported late that should have been made to an award in a previous tax year, they will consider notional entitlement and will apply it in all cases except those where the claimant has acted fraudulently or if the claimant has received notional offsetting in the past.

See our ‘understanding couples’section for more information on notional offsetting policy