Proposed HMRC powers to collect data on hours worked scrapped
The Government has scrapped plans to require employers to provide HMRC with data on the number of paid hours worked by employees following concerns from the Chartered Institute of Taxation (CIOT) about the “significant administrative burden” this would place on businesses.
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 on Tuesday. 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 CIOT warned in 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 Institute 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.”