The Government has abandoned plans to require employers to report employees’ paid working hours to HMRC, following concerns from the Chartered Institute of Taxation (CIOT) over the “significant administrative burden” it would impose on businesses.
The (Draft) Income Tax (Pay As You Earn) (Amendment) Regulations 2024 will no longer proceed after the results of a consultation were published on Tuesday. HMRC stated: “The government has listened to businesses and acted on their feedback about the administrative burden the requirements in these regulations would bring.”
In May, the CIOT warned that the estimated one-off cost to businesses of £58 million, along with ongoing annual costs of £10 million—equating to an average of £29 and £5 per business, respectively—had been “significantly underestimated.” The Institute also highlighted that collecting additional data for HMRC would create extra work for many employers.
Furthermore, the CIOT questioned the purpose behind HMRC’s request for this information and how it would be used.
Eleanor Meredith, Chair of the CIOT’s Employment Taxes Committee, welcomed the decision:
“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 it would place on businesses to provide much more detailed data to HMRC.
“We also highlighted that the cost to businesses of complying with these requirements had been underestimated, despite the calculations being revised upwards during the consultation.
“It’s reassuring that we, and other representatives, have been listened to during this process and our warnings heeded.”
Info obtained here
