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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: open year inaccuracies: overview and definition of terms current, earlier, open and closed years, open and closed return periods

Current year

An EC compliance check has only one ‘current year’, the year in which the check commenced. Employer adjustments made in that year should be claimed and extrapolated to reflect a full year (COG906590).

Up to and including 2012-13, a current year adjustment could only be recorded if an inaccuracy had been identified which would be corrected to ensure that the return would be correct.

Following the introduction of Real Time Information (RTI), a current year adjustment cannot be recorded in the majority of checks as you will be dealing with ‘closed return periods’. However, there may be justification for claiming compliance revenue in certain circumstances.


You agree an adjustment with the employer and settle your case before HMRC receives the RTI return (Full Payment Submission). You may in these circumstances record notional compliance revenue (FRB) for this current year adjustment period.

You will continue to consider current year adjustments where instruction is given to an employer to correct current year benefits (non-payroll), for example to report employee benefits on the next form P11D.

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Open year/period

An ‘open year/period’ is any tax year or tax period for which a return (P35/P14 or FPS) has not been submitted. This will usually be the year in which the case was commenced but may include earlier years or, in long running reviews, subsequent years.

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Closed year/period

A ‘closed year/period’ is any tax year or tax period for which a return (P35/P14 or FPS) has been submitted.

For example, an employer has submitted returns for 2008-09 and 2009-10. An EC compliance check commences on the 13th March 2013.

  • The ‘current’ year in which the case commenced is

    • 2012-13
  • The ‘open years’ are

    • 2010-11, 2011-12 and 2012-13
  • The ‘closed years’ are

    • 2008-09 and 2009-10.

If the case was settled on 1st November 2013 and the 2010-11, 2011-12 and 2012-13 returns were submitted in July 2013

  • the ‘closed years’ are now 2008-09 to 2012-13.

Note: From 6 April 2013, the term ‘open year’ no longer applies. This is because employers are required to report PAYE, NIC, SLD and statutory payment information ‘on or before’ they make a payment to an employee. Once the employer submits the Full Payment Submission (FPS) and Employer Payment Summary (EPS), this will become a ‘closed tax period’. Where the employer has not submitted the FPS/EPS when a payment has been made to an employee, this will be an ‘open tax period’.

Whenever inaccuracies are established for open tax years/periods you should

  • advise the employer of the correct procedures for the future, including what action to take
  • advise the employer how to make any necessary open year adjustments for years up to and including 2012-13, see COG906520 
  • obtain any outstanding end of year returns (P35/P14 up to and including 2012-13)
  • from 6 April 2013 instruct the employer to submit an FPS with the current year to date figures
  • consider penalties for late returns (COG914045, COG914050, COG914055, COG914290 and COG914295) for post April 2009 see CH80000 
  • follow the guidance at COG906570.