The original proposals were announced in July 2022 and provided a mandatory reporting requirement from 6th April 2025 to disclose exact working hours of  all staff as well as detailed information on the amount of dividends paid to directors.  Draft legislation on the rule changes had been issued in March 2024.

Throughout the Government’s consultation process, employers voiced concerns about the complexity, cost and administrative burden of the reporting requirements, including software upgrades, stressing that these updates and any other technical upgrades would be costly and administratively burdensome for business.   HMRC admitted that collecting data on this scale would be challenging.   It was estimated that the new reporting requirement on employee hours would cost businesses up to £58million in transitional costs, and a further £10million a year in compliance costs. In addition, changes to the PAYE RTI system would cost HMRC up to £6m to implement.

The Government is now also considering whether to proceed with reporting changes that would have mandated businesses and individuals to provide data on start and end dates of self-employment and dividends paid to company owner-managers.  When the proposal was first announced, the Government claimed that the move would give HMRC insight into information about the self employed, partnerships and those earning dividends.  However, HMRC has acknowledged that the scope of the proposals could infringe ‘the rights and freedoms of individuals’.