Annex 1: Minor changes in the law made by the Act: Change 62: Adjustment income: how an election affects later years: section 239
This change clarifies what happens to the remainder of adjustment income in the years after an election has been made to have the charge increased.
A barrister or advocate may be subject to a charge under Schedule 22 to FA 2002. The charge is spread over ten years in accordance with paragraph 11 of that Schedule. But an election may be made under paragraph 12 of the Schedule to accelerate the charge. In this Act, the spreading rule is in section 238. The election is in section 239.
	ExampleIf there is a charge of £1200 over ten years and an election to have £300 instead of £120 charged in year 4, there is some doubt about the “additional amount” in paragraph 12(4) of Schedule 22 to FA 2002.If it is £300, there will be six charges of £90 ([£1200-£300]/10).If it is £180, there will be five charges of £102 ([£1200-£180]/10) and a final one of £30.Policy and logic suggest the first answer but the 2002 legislation seems to suggest the second. Section 239(4) of this Act uses the “additional amount” of £180 to produce six charges of £90.
This change is adverse to some taxpayers and favourable to others in principle. But it is expected to have no practical effect as it is in line with current practice.