HMRC has cancelled plans to require reporting of information about the exact hours worked by every employee in PAYE returns. This follows widespread business concerns about the potential administrative burden faced by businesses.
The data collection on employee hours was due to start from April 2026, but has now been cancelled as part of the Government’s attempts to reduce red tape and regulatory burden for business. This additional reporting was expected to cost businesses £58 million in initial implementation costs, then £10m a year for businesses to operate.
At the time, the justification offered by Conservative ministers at the Treasury was that this level of data would improve workforce planning across the country, while reducing non-compliance.
In the responses to the initial consultation, businesses were highly critical of the measure, citing concerns about the complexity, cost and administrative burden of the reporting requirements, including software upgrades, stressing that “these updates and any other technical upgrades would be costly and administratively burdensome for business”.
In an email, HMRC has now announced that “the draft Income Tax (Pay As You Earn) (Amendment) Regulations 2024 intended to bring in these new requirements will not be progressed further. The current requirement for employers to report normal hours worked will continue.”
However, new regulations requiring the inclusion of information about directorships, close companies and dividend income in personal self-assessment returns will go ahead.