HMRC has delayed planned changes to real-time information (RTI) reporting requirements for employee hours worked. The changes were set to take effect in April 2025, but they have now been delayed until at least April 2026.
RTI Delays Explained
Back in 2022, HMRC ran a consultation on the data it collects from taxpayers. Shortly afterwards, a draft legislation was created that required businesses to give HMRC more detailed information via income tax self-assessment and employers’ RTI payroll returns. These changes have been delayed to allow employers more time to prepare for them.
What Are The Changes?
To gather more detailed information via income tax self-assessment and employers’ RTI payroll returns, this additional information will be required once the changes take effect:
- Start and end dates of self-employment
- Dividend income of shareholders in owner-managed businesses
- The number of hours worked by employees.
HMRC particularly wanted employers to report the actual or contractual hours worked by the employees. One reason for this was to make it easier for HMRC to check that employers are paying at least the national minimum wage.
Why Have The Changes Been Delayed?
The changes have been delayed to give employers more time to prepare for them. Many payroll systems are not able to handle the new RTI payroll requirements for hours worked, so it is hoped the delays will allow the software to catch up and ease the burden on employers and bookkeepers.
HMRC realised this would be an issue earlier this year and sent an email to software developers in August 2024 that said: “Due to delays owing to the general election and the lead-in time required to upgrade software and processes to prepare for implementation, employers will now not be required to start providing more detailed employees’ hours data through PAYE Real Time Information returns from April 2025. This requirement will not apply until April 2026 at the earliest. Final decisions on whether to go ahead with the regulations and any timelines will remain subject to decisions by the new government.”
What About The Other Changes?
While the requirement to report actual or contractual hours worked has been delayed, HMRC has made no suggestion that the other two changes will follow suit. So unless HMRC announces otherwise, it should be assumed that start and end dates for self-employment, plus shareholder dividend data, should be included in your self-assessment tax return from April 2025.
Understanding Your Payroll
Staying up-to-date and compliant with HMRC’s payroll changes can be difficult, especially when you’re balancing your career responsibilities. At Digital Tax Matters, you can lean on our payroll services to stay on top of your finances and focus on the success of your business. Get in touch with our team of experienced accountants today.