Scrap tax on overtime hours, says Reform UK

Reform UK proposes removing income tax on overtime hours worked above a 40-hour week for workers earning less than £75,000. The party estimates a “hard work bonus” would save a full-time nurse working six hours of overtime each week more than £1,300 per year. Reform estimates the policy would cost £5 billion annually and says it could be funded through cuts to welfare payments. Labour, the Conservatives, and the Liberal Democrats questioned whether Reform would be able to pay for the plan. Reform claims the £75,000 threshold would benefit 90% of workers and estimates about 3.2 million workers receive overtime pay. The party also proposes changes to related EU law, including Working Time Regulations, to enable workers to use the tax break.

"Getty Images Income tax on overtime above a 40-hour week should be scrapped for workers earning less than 75,000, Reform UK has said. The party estimates what it is calling a "hard work bonus" would save a full time nurse working six hours of overtime each week more than 1,300 a year. Reform said the policy would cost 5bn a year and could be paid for through its plans to make cuts to welfare payments."

"But Labour, the Tories and the Lib Dems all questioned whether Reform would find the money for the plans. Reform leader Nigel Farage said the overtime proposals would "finally make work pay, drive up productivity and restore the appeal of a strong work culture once again". He said hardworking people "look around and see that work simply doesn't pay, that benefits often match or beat what they earn, and that ordinary families are being dragged into higher tax bands with nothing to show for it"."

"Reform UK says its 75,000 threshold would mean 90% of workers could benefit from its proposed tax cut. It estimates that around 3.2 million workers receive overtime pay. Reform also gave estimates for the amount of tax people working in warehouses and as prison officers could save. The party has previously proposed ending Personal Independence Payments (Pip) for people with anxiety disorders."

"Savings made from these policies would pay for its tax cut for overtime hours, the party has argued. Reform said it would change related EU law, such as Working Time Regulations, to ensure people can "take advantage of this tax break". Last year, the Trade Unions Congress produced analysis which estimated that in 2024 3.8 million people worked an average of 7.2 unpaid hours a week, losing out on earnings of 8,000 per year."

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