Overview
- Reform UK unveiled the 'Hard Work Bonus' on Saturday, proposing to exempt income tax on paid overtime above a 40-hour week for workers earning under £75,000 and estimating an annual cost of about £5 billion.
- The party says the plan would cover roughly 90% of workers and gave examples of individual gains, such as a warehouse worker gaining about £700 a year and a Band 3 prison officer about £1,300 from regular overtime.
- Independent economists and think-tanks warn the policy lacks operational detail, noting current PAYE payroll systems do not separate overtime from regular pay and that employers would need to report overtime hours to HMRC for the exemption to work.
- Critics from Labour and the Conservatives say the policy is effectively unfunded, and analysts warn it could encourage pay reclassification, reduce productivity, or require intrusive enforcement to stop gaming by employers.
- Reform has pledged anti-avoidance rules and changes to Working Time Regulations to enable the scheme, and it is promoting the pledge as a way to win working-class votes in Red Wall areas during the Makerfield by-election.