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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: open year inaccuracies: how to make an open tax period adjustment

For guidance on how to make an open year adjustment up to 5 April 2013, see COG906520.

From 6 April 2013 employers have been required to submit a Full Payment Submission (FPS) ‘on or before’ a payment is made to an employee.

Where an open tax period has been understated the employer should correct the inaccuracy by

  • reporting the correct year to date information (pay, tax and NIC year to date figures) on their next ‘regular’ FPS; this is often the easiest way to make the correction or
  • submitting an additional FPS for the relevant pay period prior to the submission of the next ‘regular’ FPS. If the employer uses this option the ‘in this pay period’ box must only contain the difference between what had been originally reported and what the figure should be on that payment date. The year to date figures should be amended to reflect the correct year to date position for that pay period. The additional FPS should also be clearly marked with the payment date it relates to.

Note: Tax is calculated on a cumulative basis but National Insurance is non-cumulative and must be worked out on a payment by payment. The total of the additional NIC should be added to the year to date figures.