Story perspectives

Reform UK Overtime Tax Cut Saves £1,300, Costs £5bn

5/25/2026

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Summary

Story summary

Reform UK announced a “hard work bonus” to eliminate tax on overtime for workers earning under £75,000.
The party says the exemption would save employees over £1,300 a year, cost £5 billion, and be financed by £40 billion of welfare and public-service cuts.
Labour, the Conservatives, the Liberal Democrats and the Trades Union Congress have questioned the plan’s affordability and warned it could spur longer hours, noting HMRC lacks payroll reporting system.

History

Historical Context

George Osborne’s 2010 emergency budget launched the coalition’s austerity, slashing £6.2 billion from public services and targeting a balanced deficit. In 2024 Reform UK revived that logic, proposing a ‘hard-work bonus’ that removes overtime tax for earners under £75,000, financed by the Conservative plan to cut roughly £12 billion from welfare, drawing criticism from Labour and the IFS.

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Story summary

Reform UK announced a “hard work bonus” to eliminate tax on overtime for workers earning under £75,000.
The party says the exemption would save employees over £1,300 a year, cost £5 billion, and be financed by £40 billion of welfare and public-service cuts.
Labour, the Conservatives, the Liberal Democrats and the Trades Union Congress have questioned the plan’s affordability and warned it could spur longer hours, noting HMRC lacks payroll reporting system.

1 / 2