- Focusing on employees and self-employed taxpayers, the government consulted on options for the collection and use of additional data by HMRC, and how this can be shared safely across government, while minimising any extra burden for taxpayers.
- As a result, the government intends to proceed with collecting additional data on employee hours paid, dividends paid to shareholders in owner-managed businesses and start and end dates of self-employment.
- Finance Act 2024 contains provisions enabling HMRC to collect additional information from taxpayers with effect no earlier than the 2025/26 tax year onwards.
- HMRC released draft legislation in March 2024 for consultation which confirms that the following additional reporting will be required:
- Employers will be required to provide more detailed information on employees’ hours paid via Real Time Information PAYE reporting
- Directors in owner-managed businesses will be required to provide the amount of dividend income received from their own companies separately to other dividend income, and the percentage share they hold in their own companies via their Self Assessment return
- The self-employed will be required to provide information on start and end dates of self-employment via their Self Assessment return
- Other matters were considered as part of the original consultation, which the government has decided not to proceed with at this time. The government will however keep data collection in these areas under review and continue to look for ways to improve the data it already holds.
- Separately, at Tax Administration and Maintenance Day (TAMD) in April 2023, the government published a call for evidence titled The Tax Administration Framework Review: information and data seeking views on how HMRC's information and data-gathering powers could be updated to enable digitalisation of services, improve compliance and reduce administrative burdens. The call for evidence focused on standardising data provision from third parties, designing more flexible legislation, pre-population of returns, and simplifying powers to make them more consistent across different tax regimes.
- Timing: Provisions on changes to the data HMRC collects are included in the Finance Act 2024, which will take effect no earlier than the 2025/26 tax year. The consultation on the draft legislation containing the details of the additional information to be required closes 9 May 2024. The government are currently considering their response to the call for evidence on the Tax Administration Framework Review: information and data. Any policy proposals the government wish to pursue to reform the tax administration framework will be subject to further consultation.
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