Readers’ forum: Recovering PAYE overpayment

We recently submitted a voluntary disclosure of offshore interest income on behalf of a UK resident client. Until last year her only income of UK employment was covered by PAYE. She was unaware of any reporting obligations to HMRC on overseas income and did not previously file a tax return. It is agreed that the 12-year assessment period applies to the case though overseas income only commenced in 2015-16.

When preparing tax computations to establish tax due a liability of some £3 000 was arrived at for 2016-17 to 2019-20. However our calculation shows an overpayment of £4 000 for 2015-16 due to what appears excessive PAYE deductions by the employer.

The point of uncertainty is whether the standard four-year limit for overpayment relief claims applies here – in which case we see no basis for recovery of the PAYE overpayment; or can it be argued...