The Treasury has abandoned plans to collect detailed employee working hours data through PAYE real-time information (RTI) reports. Initially set to begin in April 2026, the proposal was scrapped to reduce regulatory burdens on businesses.
The reporting requirement, first introduced by the Government in 2022, would have forced employers to disclose exact working hours. It was initially scheduled for April 2025 but delayed after Labour took office. Businesses strongly opposed the measure, citing high costs, software upgrades, and administrative complexity. The Government estimated that implementation would cost £58 million, with ongoing annual costs of £10m.
HMRC acknowledged the challenges, stating that the data collection might not provide the level of detail required and could infringe on individual rights. Responding to widespread criticism, the Government announced its commitment to tax simplification, confirming that the Income Tax PAYE Amendment Regulations 2025 will not be introduced.
While the PAYE hours requirement has been dropped, new dividend reporting rules will take effect from 6 April 2025. Under the Income Tax (Additional Information to be included in Returns) Regulations 2025, personal tax returns must include details of directorships, close company status, and dividend income. Individuals, trustees, and partnerships must also report business start and end dates.
The decision to scrap PAYE hours reporting has not been widely publicised on Government websites, but ministers emphasised their goal of allowing business owners to focus on growth rather than additional red tape.
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