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HMRC internal manual

PAYE Manual

PAYE operation: incapacity benefit: apportioning incapacity benefit

Incapacity Benefit is a daily benefit (as opposed to a weekly benefit) and in strictness the amount chargeable to tax is the amount due in the year. Because cessation and changes of rate are likely to be quite frequent, apportionments will be more common than in State pension cases.

  • For calculation and repayment purposes these should be as precise as possible
  • For coding, if you are using a cumulative code, there is no objection to using whole weeks rounded in the individual’s favour

The uprating calculation for CY+1 performed by the computer at annual coding is based on whole weeks.