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This is one of those vexed areas that is begging for a Cmmrs case.
In the meantime, we'll have to make the best of what the HB/CTB regs actually provide for, along with the only CD to even get close to covering this issue - CH/0329/2003.
In principle, the income used in assessing HB/CTB should be an amount that reflects the clmt's circumstances at the time in question. Self-employed earnings are not an exception to that basic principle.
In cases where self-employed earnings have INCREASED for a past period, I've seen it vehemently argued that no amendment should be made for the previous year.
In my view, the correct way is to address any changes on the basis of a change of circumstances. So, the first question is: "Has there been a distinct change of circs?". If not, then no change to HB/CTB can occur, because there are no grounds for revision / supersession.
If there has been a change in circs (e.g. clear drop in business / clear increase in business), my view is that HB/CTB should be amended from the date of the change - irrespective of whether HB/CTB increases or decreases.
HOWEVER, as the change to HB/CTB would be "beneficial" to your client, s/he *may* be caught by the fact that s/he didn't inform the LA of the change within one month of it happening. This would mean the LA could only apply the change of circs from when they were notified. A beneficial change can go further back, but only if the clmt asks for this AND satisfies the LA that there were "special circumstances" for the late notification - DAR 9 applies.
Just for clarity (and ignoring the late change rule), there is no regulation that allows the LA to "insist" that self-employed earnings for a past period must be used for the current year.
Hope the above helps.
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