In Robert Ward v HMRC [2016] UKFTT TC05912 the First Tier Tribunal (FTT) held that excess PAYE deductions should be repaid to the employer and not the employee.

  • The taxpayer was an Australian individual who, in a previous case, the FTT had found to be UK resident in 2009/10 and 2010/11
  • Following that case his employer accounted for PAYE deductions to HMRC which resulted in an overpayment of tax for 2009/10 and an underpayment for 2010/11.
  • The taxpayer argued that this overpayment should be credited to him and set off against his liability for 2010/11 as he had reimbursed his employer for the amounts paid over to HMRC.
  • HMRC disagreed, but were willing to accept that the overpayment could be made to the taxpayer rather than his employer if he could provide evidence of the reimbursement.

The FTT rejected the taxpayer’s appeal, finding that:

  • In his self-assessment returns he was only entitled to credit for the maximum amount his employer should have deducted from his income and no more.
  • Consequently, any overpayment was payable to the employer and not the taxpayer.
  • It was up to HMRC, the taxpayer and his employer (without the involvement of the FTT) to agree whether there was sufficient evidence of reimbursement for the repayment to be made directly to the taxpayer.
  • The taxpayer was personally liable for the 2010/11 underpayment and there was no basis for the 2009/10 overpayment to be set off against this.
  • A penalty of 70% of the lost revenue could be charged in respect of 2009/10 as the taxpayer’s behaviour was deliberate and concealed in trying to mislead HMRC as to his number of days in the UK.


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Case reference: Robert Ward v HMRC [2016] UKFTT TC05912