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Notifying HMRC of employees’ hours worked – all change

The Finance Act 2024 introduced new powers to enable HMRC to collect data from taxpayers through Pay As You Earn (PAYE) Real Time Information (RTI) returns.

HMRC have since published a statutory instrument for technical consultation which specifies the type of information to be collected. 

Employers will know that currently details of employees’ hours are submitted to HMRC through their RTI return in the form of bands related to the number of hours worked (A to D). For workers on zero hours contracts, or anyone else without regular working patterns, employers can select a fifth band, (E), for ‘Other’. This has meant that HMRC have had no information on their hours. 

From April 2025, employers will be required to provide HMRC with the total number of hours paid for each employee within that pay period where that information is held. The figure for employee hours will depend on whether the employee is paid an hourly rate of pay, or via a contract which specifies a number of hours or a combination of the two in some cases. Where that information is not held, employers will be required to provide the reason by selecting one or more relevant descriptions from a list of:

  • statutory payments paid through payroll such as Statutory Sick Pay
  • taxable Benefits in Kind such as a company car or other employee benefit processed through payroll instead of reported to HMRC at the end of the tax year
  • redundancy payments and similar termination payments made when an employment ceases
  • employees who are paid by measure of output (e.g. piece work, activities undertaken)
  • officeholders such as directors or public positions not subject to contractual terms mentioning hours worked

The consultation on the proposed wording runs until 9 May and if you have any comments or observations and would like to feed into the ATT’s response, please email these to [email protected].

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.  

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