Reform UK Proposes £5 Billion Overtime Tax Cut for Workers Under £75,000
Updated
Updated · BBC.com · May 23
Reform UK Proposes £5 Billion Overtime Tax Cut for Workers Under £75,000
8 articles · Updated · BBC.com · May 23
Income tax on overtime above a 40-hour week would be scrapped for workers earning under £75,000 under a new Reform UK plan, which the party says would cover 90% of workers.
£5 billion a year is the estimated cost of the “hard work bonus”; Reform says it would fund that through welfare cuts and claims a full-time nurse doing six overtime hours weekly would save more than £1,300 a year.
3.2 million workers receive overtime pay, according to Reform, but the party also said it would change Working Time Regulations so people can take advantage of the tax break.
Labour, the Conservatives and the Liberal Democrats all attacked the proposal as unfunded, while the Institute for Fiscal Studies said it could be gamed by reclassifying work as overtime and may do little to boost labour supply.
As Britons already work long hours, can an overtime tax cut solve a productivity crisis caused by chronic underinvestment?
A similar US tax break deepened deficits. How would the UK's 'hard work bonus' avoid the same economic fate?