RTI Hours reporting 2026 proposal withdrawn

Software developers have been contacted on Tuesday 28th January 2025 to inform them that Employers will no longer be required to provide more detailed employee hours data through Pay As You Earn (PAYE) Real Time Information (RTI) returns from April 2026 as previously proposed. 

The government says it has listened to feedback and acknowledges the potential administrative burden highlighted by businesses. 

Therefore, the draft Income Tax (Pay As You Earn) (Amendment) Regulations 2024 intended to bring in these new requirements will not be progressed further. 

The current requirement for employers to report normal hours worked through banding selections A through E will continue.

The government states that remains committed to data transformation and will continue to focus on other initiatives delivering improved data, including Making Tax Digital for ITSA, digitalising business rates, and investing in the HMRC IT infrastructure

Opinion

What is difficult to understand through the hours on RTI FPS proposals is what they were actually! What was the accuracy problem HMRC experiencing! 

Originally proposed to require employer to report hours worked on the regular FPS, this was soon challenged with vast groups of employees where hours has limited to no relevance or where the data even if captured, was never passed through to payroll or served any pay related relevance.

What were the hours needed for? A question often asked at consultation meeting with no real tangible answer excepting to improves accuracy, of what was never made clear.

Was this a means of remove National Minimum Wage breach identification? A concept that appeared to be denied as an aim! So what they for!

The original banding had relevance to certain claims of benefits such as tax credits etc, however, they are all now gone and no longer relevant for benefit purposes.

For those that did not or don’t pass hours data through to payroll (many millions), were they really going to select on of the multiple reasons or excuses as to why the value would not have been reported, well now the employer doesn’t to consider it any longer.

What employers need is improvement to the general operation of RTI and its associated difficulties.

IReeN 28/1/2025