The Income Tax (Pay As You Earn) (Amendment) Regulations were due to come into force on 06 April 2025.
These were presented for consultation on 14 March 2024 and would have required the Full Payment Submission to include more details about the hours worked by an employee in the pay reference period. This may have been:
- Actual hours worked, or
- Contractual hours worked
Ian Holloway commented this posed a huge data gathering and reporting obligation on both employers and the processors of their payroll, e.g. bookkeepers. The initial data gathering was estimated as an initial £58million cost to businesses and a £10million ongoing cost. Plus, he questioned whether this increased data gathering and reporting would have led to improvements in the quality of data that HMRC holds.
HMRC communicated with software developers on 15 August 2024 as follows:
Due to delays owing to the General Election and the lead-in time required to upgrade software and processes to prepare for implementation, employers will now not be required to start providing more detailed employees’ hours data through PAYE Real Time Information returns from April 2025. This requirement will not apply until April 2026 at the earliest. Final decisions on whether to go ahead with the regulations and any timelines will remain subject to decisions by the new government.
Further guidance on the above measures will be provided when available.
For Bookkeepers
This announcement is welcomed. It was unclear from the draft Regulations about what data would be gathered and, if it was, whether RTI submissions would have led to the reliable reporting of this information.
Whilst it is welcome this change is off the table for the time being, bookkeepers should be aware of changes that are happening and affect information declared on Self-Assessment tax returns for tax year 2024/25. This requires the declaration of additional information in relation to directorships, close companies and dividend income:
- The start and end dates of periods of self-employment
- A declaration as to whether the taxpayer was a company director in the tax year
- If so, whether the company was a ‘close company’ (as per the definition in The Corporation Tax Act 2010)
- If the taxpayer was a director of a close company, the name and registered number of that close company
- The amount of dividend income received by the taxpayer from the close company (which could be zero), and
- The percentage of the taxpayer’s shareholding in the close company and if it has changed from the previous tax return
As at the time of writing, these have not been delayed and HMRC have communicated as follows:
The expected implementation date for changes to Self-Assessment returns - start and end dates of self-employment and dividends paid to company owner managers - remains achievable for April 2025.
However, whether and when to proceed with implementing the regulations remains subject to decisions by the new government.
So we should know by the 30 October 2024 UK Budget about these proposals and whether they will be put into law. Look out for the progress of The Income Tax (Additional Information to be included in Returns) Regulations 2024.
