- 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
- Business tax compliance costs £15 billion a year
- £35 million added to State Pension pots
- Rate cut brings ‘measure of relief’ to business
Proposed HMRC powers to collect data on hours worked scrapped
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
Tailored tax reliefs boost alcohol sector
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
11.5 million file self-assessment by 31 January deadline
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
Business tax compliance costs £15 billion a year
An increasingly complex tax system is costing UK businesses an estimated £15.4 billion a year in compliance, according to a report from the National Audit Office (NAO).
HMRC’s cost of collecting tax has risen by £563 million over the past five years due to added complexity in the system plus investments in staff and IT.
During this period, the government’s tax yield rose by £113 billion in real terms, said the NAO.
HMRC estimates that compliant UK businesses incur costs of £15.4 billion each year in meeting around 2,500 obligations across 27 policy areas. These include £6.6 billion of fees paid to agents, accountants and other intermediaries, £4.5 billion of acquisition costs, such as software, and £4.3 billion of internal costs.
The report warned that HMRC is underestimating these costs as it does not take into account all taxpayer obligations.
Frank Haskew, Head of Taxation, at the Institute of Chartered Accountants in England and Wales (ICAEW), said:
‘This report highlights how the UK’s increasingly complicated tax system is saddling businesses and HMRC with extra burdens and costs, which are growing in real terms. The report also substantiates our concern that the cost to businesses of complying with their tax obligations is likely to be understated.’
Internet link: NAO website ICAEW website
£35 million added to State Pension pots
More than 37,000 online payments have been made through the online service, equating to 68,673 years of contributions.
The average online top-up payment is £1,835 and the largest weekly State Pension increase is £113.76. HMRC says that 65% of the years topped up by customers are from 2017 onwards.
HMRC and Department for Work and Pensions (DWP) are reminding customers they only have until 5 April to check their NICs record and fill any gaps from 6 April 2006 onwards.
From 6 April 2025, people will only be able to make voluntary National Insurance contributions for the previous six tax years, in line with normal time limits.
The Check your State Pension forecast service on GOV.UK is the quickest and easiest way to check if action is required, says HMRC. The HMRC app can also be used.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:
‘There are just two months left to check and fill any gaps in your NICs record from 2006 onwards to boost your State Pension entitlement. Don’t delay – it is quick and easy to check your NICs record on GOV.UK and it could help your finances in retirement.’
Internet link: HMRC press release
Rate cut brings ‘measure of relief’ to business
Businesses will get a ‘measure of relief’ after interest rates were cut by the Bank of England, says the British Chambers of Commerce (BCC).
The Bank cut the base rate from 4.75% to 4.5%, the lowest level since June 2023.
The Bank’s Monetary Policy Committee voted 7-2 in favour of the cut – those two members wanted a bigger cut, to 4.25.
The Bank also cut its growth forecast for the UK economy to 0.75% in 2025, down from a previous forecast of 1.5%.
David Bharier, Head of Research at the BCC, said:
‘Given the raft of cost pressures and global economic uncertainties businesses are facing, today’s interest rate cut provides a measure of relief for SMEs.
‘UK businesses are facing a range of challenges. Domestically, firms face increased tax bills and employment costs within weeks, with national insurance and minimum wage hikes. Internationally, a looming trade war could hit many UK importers and exporters. This is likely to feed into heightened inflation throughout the year.
‘The government needs to pull all levers possible to ease the cost pressures on firms and unlock investment opportunities. That includes accelerating business rate reform, supporting infrastructure projects and boosting trade opportunities.’
Internet link: Bank of England website BCC website
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