The government has stopped controversial plans to collect information about the
exact hours worked by every employee in PAYE returns.
The data collection on employee hours was meant to start from April 2026, but the
plan has been scrapped as part of the government's attempts to reduce red tape
and regulatory burden for business.
The (Draft) The Income Tax (Pay As You Earn) (Amendment) Regulations 2024 will
not be progressed further after the results of a consultation were published.
HMRC said:
'The government has listened to businesses and acted on their feedback about
the administrative burden the requirements in these regulations would
bring.'
The Chartered Institute of Taxation (CIOT) warned last May that the estimated
one-off cost to businesses of £58 million and ongoing costs of £10 million - an
average per business of £29 and £5 respectively- were “significantly
underestimated” and that gathering additional data to provide to HMRC would lead
to extra work for many employers.
The CIOT added it was unclear why HMRC wanted to collect this information and
what they were going to use it for.
Eleanor Meredith, Chair of the CIOT's Employment Taxes Committee, said:
'We're pleased to see the Government's decision not to progress this
legislation. We raised several concerns about the proposal, primarily the
extra burden this would place on businesses to provide much more detailed
data to HMRC.
'We also raised concerns that the cost to businesses of complying with these
requirements had been underestimated, despite the calculations being revised
upwards during the course of the consultation.
'It's reassuring that we, and other representatives, have been listened to
during this process and our warnings heeded.'
Internet link: GOV.UK CIOT