Plans for employers to collect paid hours data to be scrapped

The government has released the results of a consultation concerning plans to collect data on worker’s paid hours.

The proposed plan was to make it a requirement for employers to provide HMRC with data on the number of paid hours worked by employees, however, this has now been scrapped.

Responding to the consultation results, 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 decision has been very much welcomed, in particular by the Chartered Institute of Taxation (CIOT), which had warned in May 2024 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 this additional data would lead to extra work for many employers.

It was also added that it was unclear why HMRC wanted to collect this information and what they were going to use it for.

Commenting on the news, 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.”

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