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Reform UK has proposed removing income tax on overtime hours worked beyond a 40-hour week for employees earning under £75,000 annually. The party refers to this as a “hard work bonus,” suggesting that a full-time nurse who works six hours of overtime each week could save over £1,300 yearly as a result. Reform estimates the policy would cost about £5 billion per year, funding which they plan to secure by reducing welfare payments.
The party’s leader, Nigel Farage, stated that this change would “finally make work pay, drive up productivity and restore the appeal of a strong work culture once again.” He emphasized that many hardworking individuals currently see little financial gain in working overtime, with benefits sometimes equaling or surpassing earned wages, and families being pushed into higher tax brackets without clear benefits. According to Reform UK, about 90% of workers would be eligible for the tax cut thanks to the £75,000 income threshold, and they estimate approximately 3.2 million people receive overtime pay.
Despite Reform’s claims, the proposal has met with skepticism from other political parties. Labour, the Conservatives, and the Liberal Democrats have all questioned whether the necessary funding for the plan is realistic. Treasury Chief Secretary Lucy Rigby highlighted the lack of clarity around the significant £40 billion in cuts Reform claims are prepared to make, asking for honesty about which public services might be affected. Shadow Chancellor Sir Mel Stride criticized the proposal, arguing that tax reductions should be managed “in a fair and responsible way” and accused Reform of promising measures they cannot deliver. Meanwhile, Liberal Democrat deputy leader Daisy Cooper dismissed the plan as “Farage’s fantasy economics” and pointed out that her party had previously raised the income tax threshold to relieve millions from paying tax altogether.
Experts have also weighed in on the proposal. Helen Miller from the Institute of Fiscal Studies described the plan as “problematic in principle and practice.” She questioned why incentives should be aimed specifically at increasing hours for employees already working at least 40 hours weekly if the goal is to boost labor supply. Miller further warned that the plan might encourage employers to label more work as “overtime” to benefit from tax reductions, noting that similar policies implemented in France did not yield encouraging results. Reform has suggested updating related European Union regulations, such as the Working Time Directive, to help make employees eligible for this tax break
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