In 2022, the then government consulted on a number of potential options for improving the quality and range of data collected and used by HMRC. The government said that its intention was to improve outcomes for taxpayers and businesses as well as overall compliance. 

In March 2024, the government published draft legislation with regard to the data HMRC collects from individual taxpayers and from employers. ICAEW summarised the additional requirements for employers in an article published at the time. The changes for employers were due to take affect from April 2026 (delayed from April 2025).  

In its response to the consultation on the legislation, ICAEW: 

• questioned the legal basis for requiring employers to provide employee hours;
• urged HMRC to consider if the new requirements were value for money given the additional costs imposed on employers; and 
• identified areas where the legislation was flawed.  

HMRC has announced that it has decided not to progress with the new requirement for employers, having listened to “feedback about the administrative burden” that would be placed on businesses. The current requirement for employers to report normal hours worked will continue. 

Adelle Greenwood, Technical Manager for employment taxes at ICAEW, said: “We are delighted that the government has decided not to progress these proposals further. Employers will be relieved not to have to contend with the additional reporting burden, which may have been unworkable and resulted in inaccurate data. The proposals would have done little if anything to help with the collection or management of taxes”. 

The legislation relating to individual taxpayers has become law. Directors and sole traders may need to provide additional information with effect from 6 April 2025. This will be considered in detail in a separate article.  

Further information 

• Consultation outcome - Draft legislation: Improving the data HMRC collects from its customers