Is holding altitude as stringent a requirement when flying VFR-on-top? If the deviation exceeds say 200 feet off a given VFR altitude (i.e. 5500’ heading eastbound) is this as big of an issue for ATC?
Considering, as a pilot, you should be able to maintain an altitude with Less than a 100 foot accuracy, I would say that you should be doing the same when VFR-on-Top. If you change (vacate) that altitude for any reason, you should let ATC know. They are still maintaining aircraft separation. They need to anticipate your current and future position. If it’s a brief departure from the previously reported altitude (say for instance, due to turbulence), reporting the discrepancy is not important if you return to the original altitude immediately. Though, you might want to give ATC and/or FSS a PIREP.
In the US, when I enter "OTP" in your flight plan, my radar will display your reported mode C altitude. If you're consistently out of tolerance (200 ft) from a VFR cruising level, and I've given you a current altimeter, it's my job to advise you of the discrepancy.
After all, your equipment could have a problem.
If you reply that you're having trouble holding altitude for weather, or staying clear of clouds, and I have no traffic for you, I'll probably leave it be for awhile, but I will check up on you.
There are also times when I may use the phraseology "VFR cruising levels for your direction of flight are (odd/even) cardinal altitudes plus 500 feet". This is usually in conjunction with traffic advisories, such as, you're flying eastbound at FL105, but I've got westbound traffic at the same altitude, that may be in conflict. They're at a correct cruising altitude, so I'd give you the advisory.
See AIM 5-5-13. The clearance must be requested in the flight plan or subsequently. 5-5-13(a)(1) and AIM 4-4-8. There are 3 requirements: 1) The pilot must fly at an appropriate VFR altitude as defined in 14CFR91.159, comply with VFR visibility and cloud clearance as established in 14CFE91.155 and finally, comply with the IFR rules applicable to the flight. By requesting VFR on Top, the pilot assumes see and avoid responsibility and, per 5-5-13 (a)(3) should advise ATC of any altitude change prior to making such change. Typically ATC will approve VFR on top if the clearance is requested but the pilot continues to be controlled by his IFR flight plan and remains clear of Class A airspace. PIREP’s as to top heights and layer conditions assist ATC in the assignment of such a clearance and flight level.