Reform UK has unveiled a major tax policy proposal that would eliminate income tax on overtime work, a plan the party says would cost approximately five billion pounds and directly benefit millions of workers across the country. Under the proposal, employees who have completed their standard contracted 40 hours would pay no income tax on any additional hours worked beyond that threshold.
Speaking on Sky News, a Reform spokesperson said the plan would be funded through savings in welfare spending. The party has already announced 40 billion pounds in welfare cuts, including ending payments to migrants and to people choosing not to work. The spokesperson described the proposal as sending the strongest signal that Reform is for working people who choose to do extra hours.
The proposal has drawn sharp contrasts with the Labour government's own cost-of-living measures. The Chancellor's Great British Summer of Savings package includes VAT cuts on summer activities and free bus travel for children, but critics have pointed out that the savings amount to just 1.64 pounds off a typical family theme park visit costing around 200 pounds. The interviewer described this as emblematic of Starmerism, where big problems produce tiny solutions.
Labour's Chief Secretary to the Treasury Darren Jones dismissed the Reform proposal, warning that employers would game the system by reclassifying unpaid overtime as paid overtime to reduce tax burdens. He also suggested Reform would need to cut NHS funding to pay for the plan. Reform rejected this characterisation, insisting the party is not planning cuts to the National Health Service.
The debate comes against a backdrop of falling net migration figures, which dropped to 171,000, the lowest in five to six years. While Reform welcomed the decline, the party argued the numbers remain too high. The overtime tax proposal represents a significant escalation in the tax policy debate ahead of potential future elections, positioning Reform as the party of working-class tax relief against Labour's incremental approach to cost-of-living support.