ECH9005 - Open Year Irregularities: Overview and Definition of Terms Current, Earlier, Open and Closed Years

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 ( ECH9045).

A current year adjustment can only be recorded if an irregularity has been identified which will be corrected to ensure that the return will be correct.

An "open year" is any tax year for which a return 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.

A "closed year" is any year for which a return has been submitted.

For example, an employer has submitted returns for 2003-04, 2004-05 and 2005-06. An EC compliance check commences on the 13th March 2009.

• The “current” year in which the case commenced is
  
  
• • 2008-09

• The open years are
  
  
• • 2006-07, 2007-08 & 2008-09

• The closed years are
  
  
• • 2003-04 to 2005-06.

If the case was settled on 1st November 2009 and the 2006 -07, 2007-08 and 2008-09 returns were submitted in May 2009

• 2009-10 is now an open year
• the closed years are now 2003-04 to 2008-09.

Whenever open year irregularities are established you should

• advise the employer of the correct procedures for the future, including what action to take at the end of year
• advise the employer how to make any necessary open year adjustments ECH9010
• obtain any outstanding end of year returns and
• consider penalties for late returns ( ECH21020, ECH21025, ECH21026, ECH21245 & ECH21250)
• follow the guidance at ECH9035.