Proposed HMRC powers to collect data on hours worked scrapped

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