
Reform UK Proposes Abolishing Income Tax on Overtime for 90% of Workers
Reform UK has outlined a plan to abolish income tax on all overtime hours worked beyond a standard 40-hour week, applicable to workers earning less than £75,000. The party claims this initiative, dubbed a "hard work bonus," would save a full-time nurse undertaking six hours of overtime weekly over £1,300 per year.
The policy's estimated annual cost of £5 billion would be offset by cuts to welfare payments, according to Reform UK. However, Labour, the Conservatives, and the Liberal Democrats have all questioned the feasibility of these funding proposals.
Nigel Farage, leader of Reform UK, stated that the overtime tax cuts would "finally make work pay, drive up productivity, and restore the appeal of a strong work culture once again." He argued that many workers perceive 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 estimates that its £75,000 threshold would benefit 90% of the workforce, impacting approximately 3.2 million workers who receive overtime pay. The party cited potential savings for warehouse staff and prison officers.
Previously, Reform UK has advocated for ending Personal Independence Payments (PIP) for individuals with anxiety disorders and stripping EU citizens of their right to claim benefits. These savings, the party asserts, would finance the proposed overtime tax cut. Reform UK also stated it would amend relevant EU legislation, such as Working Time Regulations, to facilitate this tax break.
In contrast, last year's analysis from the Trade Unions Congress indicated that 3.8 million people worked an average of 7.2 unpaid hours weekly in 2024, representing a loss of £8,000 per year in earnings, with teaching and health and care professions disproportionately affected.
Treasury Chief Secretary Lucy Rigby criticised the plan, stating, "If Reform want people to take their unfunded, back-of-a-fag packet plans seriously, they should come clean about where their £40 billion of cuts would fall and which public services would pay the price." Shadow chancellor Sir Mel Stride added, "Hard work should be rewarded, which means getting taxes down in a fair and responsible way. Reform's proposal sets out no new savings... they keep promising things they cannot deliver."
Liberal Democrat deputy leader Daisy Cooper dismissed the proposals as "Farage's fantasy economics," a "gamble our country cannot afford to take." Helen Miller of the Institute of Fiscal Studies described the Reform proposal as "problematic in principle and practice," questioning why an incentive to increase labour supply would target those already working at least 40 hours weekly. Miller also warned of potential incentives to reclassify work as "overtime" to reduce tax, citing "evidence from a similar French policy is not encouraging."

