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Where Taxpayers and Advisers Meet

What is an open or closed tax year?

Novat
Posts:21
Joined:Thu Jun 01, 2017 5:10 pm
What is an open or closed tax year?

Postby Novat » Thu Jun 08, 2017 11:42 am

What does an open tax year mean?

What does a closed tax year mean?

Are these terms that affect income tax/paye or are they more for self employed contractors?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: What is an open or closed tax year?

Postby bd6759 » Thu Jun 08, 2017 4:57 pm

Depends on the context.

Closed usually means previous tears and open means the current year.

Novat
Posts:21
Joined:Thu Jun 01, 2017 5:10 pm

Re: What is an open or closed tax year?

Postby Novat » Thu Jun 08, 2017 6:42 pm

I came across this thread on calculating interest on another forum and someone stated at the bottom of the page that it depended on whether or not the tax year was still open. I don't understand what that means.

http://forums.contractoruk.com/hmrc-sch ... erest.html

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: What is an open or closed tax year?

Postby bd6759 » Fri Jun 09, 2017 4:52 pm

Only the author will know what he means. He is possibly referring to the time limits for making an assessment, which can be 4, 6,or 20 years, but open or closed is rarely used to describe that.

Novat
Posts:21
Joined:Thu Jun 01, 2017 5:10 pm

Re: What is an open or closed tax year?

Postby Novat » Sun Jun 11, 2017 4:41 pm

On another thread over on the contractoruk forum I found this explanation between open and closed tax years. Does it make anymore sense? I'm assuming this is not something related to PAYE as it refers to a self assessment.

It says:
Open = a year for which HMRC have sent you an enquiry or discovery assessment
Closed = HMRC haven't enquired within 1 year of receiving your self assessment and the year is now beyond the 4 year discovery window
http://forums.contractoruk.com/hmrc-sch ... rge-6.html

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: What is an open or closed tax year?

Postby bd6759 » Mon Jun 12, 2017 5:37 pm

For PAYE an "open" year is usually one where the final submission hasn't been made. That usually occurs in April just after the tax year ends. The year closes once it has been made.

For self asessment, if an enquiry has been opened, the tax return can be amended by HMRC whent the enquiry closes. This can be many years later in a complicated enquiry.

If an enquiry hasn't been opened, the return cannot be amneded (but an assesment can be made).

These are not statutory terms. If you are wondering whether HMRC can now chase you for unpaid tax, those terms, whatever definition you apply, will not decide the matter.

Novat
Posts:21
Joined:Thu Jun 01, 2017 5:10 pm

Re: What is an open or closed tax year?

Postby Novat » Mon Jun 12, 2017 9:13 pm

When you say "final submission" do you mean the employers payroll department has notified hmrc of your pay for the year?

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: What is an open or closed tax year?

Postby SteLacca » Wed Jun 14, 2017 8:49 am

HMRC use the term "Open" to refer to a year which they haven't finally reconciled. They used to (and possibly still do) work from an "Open List" after the end of the each tax year to reconcile errors in PAYE where the final figures didn't agree to tax tables, Month 1 basis code was in operation, plain error etc..

Of course, we know that these days HMRC rarely work anything, and so a broad brush approach is probably adopted more frequently these days.

Novat
Posts:21
Joined:Thu Jun 01, 2017 5:10 pm

Re: What is an open or closed tax year?

Postby Novat » Wed Jun 14, 2017 5:47 pm

Thanks


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