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image of children dressed as businessmen having ideas | accountingweb | Consultation: additional data requirements from April 2025
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One of HMRC’s cunning data-collection plans

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Following HMRC’s consultation on additional data requirements, Ian Holloway looks at its plan for the reporting of employee hours worked via Real Time Information from April 2025.

17th Apr 2024
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“Plan” is the Westminster word of 2024 and you will hear much more of this in the run-up to the general election. HMRC has two plans – one for tax year 2025/26 and another for tax year 2026/27. It is questionable whether either of these will result in achieving the desired ambition. More likely they will cause havoc for employers, taxpayers and HMRC if they are not implemented correctly.

On 20 July 2022, the then-financial secretary to the Treasury, Lucy Fraser, launched a consultation entitled Improving the data HMRC collects from its customers. In essence, HMRC wanted to collect more data about employers and workers (which will be shared within and used by the UK government). The plan was to create a database of information to create an “accurate and up-to-date picture of citizens and businesses”, which would help influence policy decisions.

Nothing was mentioned about the way that HMRC uses and processes the data it currently has, only that they wanted more of it to fill their perceived data gaps. In the 27 April 2023 responses, HMRC dismissed the collection of:

  1. the business sector of the self-employed (via self assessment returns) 
  2. the occupations of employees and the self-employed (via Real Time Information (RTI) and self assessment returns), and
  3. the location of an employment or a business (via RTI).

These dismissals were sensible as there is no way that a busy payroll professional, accountant or bookkeeper could fiddle about understanding Standard Industrial Classifications (SIC) and Standard Occupational Classifications (SOC) codes, let alone whether the employee was based in Blackburn or Preston. 

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Replies (12)

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By Rob Swan
17th Apr 2024 14:10

More holes than a sieve!
Even the Jumblies wouldn't touch it!

Thanks (2)
Replying to Rob Swan:
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By Rob Swan
18th Apr 2024 07:58

To avoid confusion, the 'holes' I refer to are in HMRC's approach.
Excellent article.

MTD collects data you don't 'enter' (such as IP addresses and computer system details) for 'verification' and fraud detection etc.... So what happens if an employer uses a payroll agency at the other end of the country or.... Goes on holiday abroad but still has to run a weekly payroll from.... Africa! Using their nephew's gaming PC!! Hmmmm.....

Thanks (2)
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By FactChecker
17th Apr 2024 19:02

Excellent ... the overview above (not the ensuing chaos within HMRC if ever attempted)!

May I refer my learned friend to his recent article at https://www.accountingweb.co.uk/tax/hmrc-policy/dark-clouds-loom-over-pa... ... and my comments posted in response to it.

In particular ... the references to 'Hours worked' (in the draft Regs) even though most people can only attempt to report on 'Hours being paid' - which as anyone who has wrestled with NMW will tell you are rarely the same thing.

The only absolute certainty is that IF this nightmare is made law then we'll look back with fondness on those halcyon days of 2023-24 ... you know when the shortage of HMRC staff was just a theoretical concept, unlike now (2025-26).

Thanks (9)
Replying to FactChecker:
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By johnjenkins
18th Apr 2024 10:32

I think it's time Government gave everyone a work status and give pocket money accordingly. No need for HMRC or debt collectors. Just additional police to make sure people did the work they are supposed to do. Cos that's the way it's going. You can see stagnation increasing.

Thanks (5)
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By flightdeck
18th Apr 2024 10:26

Good article, thank you

Thanks (1)
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By Stoker
18th Apr 2024 10:30

Thanks for the article and warning, though there doesn't seem much we can do about it.

The data will be wrong, it will analysed wrongly, it will be considered right and the output will be garbage. We will all become "sub postmasters". What foolishness.

And I am not a "customer" of HMRC; were I one actually, I would take my business elsewhere.

Thanks (10)
Replying to Stoker:
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By Rob Swan
18th Apr 2024 11:59

Stoker,
You have my vote for AW 'Comment of the Year, 2024'. I am satisfied (mid April) that it will not be surpassed this year.

Thanks (2)
Replying to Rob Swan:
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By Stoker
19th Apr 2024 12:05

Too kind.

Thanks (1)
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By jon watkin
18th Apr 2024 11:14

There are many strands to what makes up an employee's pay, it's not just basic hours worked or salary. Overtime, bonuses and all manner of allowances can be included, usually specific to the employer or industry in which they operate. The public sector is awash with pay types in some departments. Will all those have to be included as well in case some fool at HMRC thinks that by dividing hours into gross pay they can deduce an hourly rate of pay and draw conclusions from it? And you can be assured that this information will end up elsewhere, to check up on tax credits and care allowances for example. One simple mistake in a payroll submission or wrong conclusion made could make life very difficult for honest claimants, and given the dearth of HMRC support, very difficult for them to rectify. HMRC would be better to concentrate on chasing tax dodgers and fraudsters and give the legions of payroll professionals doing their bidding in this endless quest for statistics, a break.

Thanks (4)
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By ruth.julian
19th Apr 2024 00:55

This will be managed by a Dept which cannot ensure its own employees' hours of work have been recorded accurately...

Thanks (7)
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By Carol Jefferis
22nd Apr 2024 11:13

I have a vague recollection of reading somewhere recently that HMRC are planning to track down dividends from small companies by looking at reductions in Retained Profits figures in successive balance sheets, that does strike me as both do-able and sensible because between them HMRC and Companies House should have the information already.
But - as a mitigation for non-dividend-declaring taxpayers - surely I can't be the only person who has had to try and explain that the HMRC criteria for filing an SA return that say one is required when dividends exceed £10,000 cannot be turned around to mean that dividends below £10,000 exempt you from the need to file a return?

Thanks (1)
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By norstar
24th Apr 2024 10:00

Didn't they mandate the completion of a box for income derived from a service company, some years ago? However I think I'm right in saying that SA penalties only apply to scenarios with a loss of tax or late filing. What are the possible penalty avenues if a box is not completed that has no impact on reliefs, taxes etc, then there's no loss to the exchequer?

Thanks (0)