ICAEW’s Tax Faculty has responded to a consultation on draft regulations intended to improve the data HMRC collects from employers and individual taxpayers from April 2025.  

Purpose of the regulations 

The regulations require employers to provide more detailed information on employees’ hours in pay as you earn (PAYE) real time information (RTI) returns. Directors of close companies must provide information about the company, their shareholding and any dividends received in their tax return. Where self-employment begins or ends during the tax year, the person must report the date of commencement or cessation in their tax return. 

ICAEW view on the requirement to provide employee hours 

The faculty continues to question the legal basis for requiring employers to provide employee hours. Employers will incur additional costs in complying with the measure. ICAEW recommends that HMRC reviews the measure over the next five years to determine whether it is providing value for money. 

The faculty has identified areas where it believes the regulations are flawed. Also, other new obligations are proposed for employers, such as the mandatory payrolling of employer-provided benefits-in-kind. Therefore, ICAEW urges HMRC to delay implementing the employer information changes until 6 April 2026. Detailed guidance for employers, payroll agents and payroll IT developers should be published as a matter of urgency if the current start date of April 2025 is to be maintained.  

ICAEW view on the requirements for self assessment taxpayers 

For taxpayers, the consequences of failing to provide details of interests in close companies should be made clear. Guidance is needed to explain how to determine the person’s percentage shareholding where a company has issued more than one class of share. However, identifying the date on which a trade started or ended can be difficult. Therefore, guidance should be provided in the notes to the tax return.  

The faculty recommends that a start date of the beginning of the tax year should be reported where an existing trade was previously exempt from reporting (for example, due to the trading allowance).