In this week’s Enews, we look at the government’s decision to scrap powers for HMRC to collect data on the hours employees work. There is also news on tax reliefs for the alcohol sector and the self assessment deadline to update you on.

• Proposed HMRC powers to collect data on hours worked scrapped
• Tailored tax reliefs boost alcohol sector
• 11.5 million file self assessment by 31 January deadline

The government has stopped controversial plans to collect information about the exact hours worked by every employee in PAYE returns.

The data collection on employee hours was meant to start from April 2026, but the plan has been scrapped as part of the government’s attempts to reduce red tape and regulatory burden for business.

The (Draft) The Income Tax (Pay As You Earn) (Amendment) Regulations 2024 will not be progressed further after the results of a consultation were published.

HMRC said:

‘The government has listened to businesses and acted on their feedback about the administrative burden the requirements in these regulations would bring.’

The Chartered Institute of Taxation (CIOT) warned last May that the estimated one-off cost to businesses of £58 million and ongoing costs of £10 million - an average per business of £29 and £5 respectively- were “significantly underestimated” and that gathering additional data to provide to HMRC would lead to extra work for many employers.

The CIOT added it was unclear why HMRC wanted to collect this information and what they were going to use it for.

Eleanor Meredith, Chair of the CIOT’s Employment Taxes Committee, said:

‘We’re pleased to see the Government’s decision not to progress this legislation. We raised several concerns about the proposal, primarily the extra burden this would place on businesses to provide much more detailed data to HMRC.

‘We also raised concerns that the cost to businesses of complying with these requirements had been underestimated, despite the calculations being revised upwards during the course of the consultation.

‘It’s reassuring that we, and other representatives, have been listened to during this process and our warnings heeded.’

Internet link: GOV.UK | CIOT website

The government has introduced a package of support that it says will help the alcohol sector to grow.

From 1 February, draught relief has increased to knock 1p off duty on draught products whilst small producer relief – a measure to encourage craft brewers to innovate - is becoming more generous.

Together these tax cuts are worth £85 million and are tailored to support the alcohol sector to innovate and grow, according to HM Treasury.

The increase to draught relief, first announced at Autumn Budget, will affect around three in five of all alcoholic drinks sold in pubs, and represents the first duty cut on a pint of beer in 10 years.

As announced at the Autumn Budget, alcohol duty was also increased in line with inflation. The Treasury says this helps secure public finances and helps to fund the investment needed to grow the economy and fund public services.

Exchequer Secretary to the Treasury, James Murray, said:

‘Our pubs and brewers are an essential part the fabric of the UK and our brilliant high streets. Through draught relief, small producer relief, and expanding market access for smaller brewers, we will help boost sector growth and deliver our Plan for Change to put more money in working people’s pockets.’

Internet link:  HM Treasury website

More than 11.5 million taxpayers beat the self assessment deadline to file their tax return for the 2023/24 tax year by 31 January and avoid a £100 late filing penalty, according to HMRC’s data.

Almost three quarters of a million taxpayers left it to the last minute to file with 732,498 submitting returns on deadline day.

The most common time to file on 31 January was 16:00 to 16:59 when 58,517 people submitted returns. And 31,442 taxpayers cut it as close as possible by filing between 23:00 and 23:59.

Late filing and late payment penalties are charged for failure to meet the deadline. HMRC is urging anyone who has missed the deadline to file their tax return now and pay any tax owed.

The tax authority says one of the quickest ways to pay is via the free and secure HMRC app. Time to Pay arrangements are available for those who cannot pay their tax bill in full, it adds.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘Thank you to the millions of people and agents who filed their self assessment tax return and paid any tax owed by 31 January. I’m urging anyone who missed the deadline, to submit their return as soon as possible to avoid any further penalties. Search ‘self assessment’ on GOV.UK to find out more.’

Internet link: HMRC press release