Employment tax: Proposed changes to how HMRC collects data

HMRC has released draft legislation and a policy paper that proposes changes to the data HMRC requires from employers, shareholders and the self-employed. From the 2025-26 tax year onwards, additional obligations include:

• Employers will need to provide more detailed information on employee hours using Real Time Information (RTI).
• Self Assessment tax returns will be required to include:
  • For owner-managed company shareholders:
    • The amount of dividend income received from their own companies separately to other dividend income.
    • The percentage share they hold in their own companies.
  • For the self-employed:
    • The start and end dates of self-employment.

HMRC states that this will improve the quality of data to:

• Provide better outcomes for taxpayers and businesses
• Improve compliance
• Build a more resilient tax system

This also follows the proposals published within the IR35 offset consultation, which proposes engagers retain additional information about the contractors they engage with. This will increase HMRC employer compliance and National Minimum Wage (NMW) reviews, as well as individual enquiries.

The Government also announced that it wants to simplify the process of collecting the High Income Child Benefit Charge (HICBC). It proposes to collect the HICBC via the individual’s tax code rather than the current method of completing a Self Assessment tax return. This will be particularly useful for those individuals whose only income is via PAYE. We expect further details to follow on this but more can be read here.

How haysmacintyre can help

Employment tax compliance continues to be at the top of HMRC’s agenda, and although these rules are not to be introduced until the 2025-26 tax year following the consultation, prevention is better than the cure.

We can check if your employment tax procedures, controls, and governance are robust by undertaking employment tax health checks, and NMW and employment status reviews. Contact our team for further guidance.