Reform UK proposes scrapping overtime tax for under-£75,000 earners

The news

Reform UK has announced plans to scrap income tax on overtime above a 40-hour week for workers earning less than £75,000. The party estimates the measure, which it calls a "hard work bonus", would save a full-time nurse working six hours of overtime each week more than £1,300 a year. Reform UK says the policy would cost £5bn a year and could be funded through cuts to welfare payments. Labour, the Conservatives and the Liberal Democrats have all questioned whether the party could find the money for the plans.

What's at stake

The proposal targets income tax on overtime pay for people working beyond a standard 40-hour week. Reform UK estimates that around 3.2 million workers receive overtime pay and says its £75,000 threshold would mean 90% of workers could benefit. The party has previously proposed ending Personal Independence Payments for people with anxiety disorders and stripping EU citizens of the right to claim benefits, arguing that savings from these policies would pay for the overtime tax cut.

Reform UK says it would change related EU law, such as Working Time Regulations, to ensure people can take advantage of the tax break. The measure is presented as a response to concerns that work does not pay enough and that ordinary families are being dragged into higher tax bands.

The case for

Workers should keep more of the money they earn for extra hours. Reform UK argues the change would finally make work pay, drive up productivity and restore the appeal of a strong work culture. The party says hardworking people look around and see that work simply does not 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. A full-time nurse working six hours of overtime each week would save more than £1,300 a year under the plans.

The case against

Scrapping overtime tax would mainly benefit higher earners and cut public revenue. The policy is estimated to cost £5bn a year, and Labour, the Conservatives and the Liberal Democrats have all questioned whether Reform UK would find the money for the plans. Critics point out that the £75,000 threshold would still allow many higher-paid workers to benefit while reducing funds available for public services.

Why it matters now

If the proposal were implemented, workers earning under £75,000 who do overtime would keep the full amount of extra pay without income tax deductions. If rejected, the current system of taxing overtime pay would remain in place. The pledge has been highlighted across multiple Sunday newspapers as a key Reform UK position ahead of future electoral tests.

Further reading

BBC News

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