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HMRC internal manual

Self Assessment Manual

Returns: individuals returns: earlier years adjustment (EYA) in code

A clerical adjustment for Flat Rate Expenses or other expenses due for earlier years may have been included in the current year code under the PAYE Service descriptor Earlier Years Adjustment before the case was put into SA for the year. The adjustment is separate from the amount of Flat Rate Expenses (FRE) or other expenses (EXP) due for the current year.

Where the case is already SA for the year EYA cannot be coded, and claims for earlier years, where a return has been issued and processed, must either be dealt with by amending the return, where appropriate, or by treating as a claim made outside a return. See subject ‘Claims made outside a return’ for further information (SAM114000).

The adjustment, coded for the current year, includes the amount repayable plus any supplement converted to a code adjustment.

The Employment page notes (SA102 Notes) advise the customer to contact us for advice if their PAYE Coding Notice shows an adjustment for expenses for an earlier year. If the customer does contact us and is completing a paper return, you should advise them to enter details of the claim in the Additional Information box on the main return. If the customer is completing their return online, you should advise them to increase the amount of tax deducted from their employment income for the year and enter details of the adjustment in the Additional Information box on the main return.

For information on how to calculate the adjustment, see subject ‘Earlier years adjustment (EYA) in code’, (Action Guide) at SAM121661 and follow steps 2 and 3.

The adjustment is an overpayment of tax in respect of earlier years and does not effect the taxpayer’s self assessment for the return year.

For cases where the taxpayer does not enter details in the Additional Information Box you will only be able to identify a case when carrying out the Coding (Integrity) Check. The return is not unsatisfactory if the EYA is not on the return.

When you capture the return it is necessary to treat the overpayment of tax, plus supplement, relating to the EYA as additional PAYE tax and to explain the adjustment to the taxpayer using a Customer Service Message (SAM121435).