Home Business & Industry Overtime Pay Sees HMRC Wage Bill Rise by £5.5 Million Following Significant Job Cuts

Overtime Pay Sees HMRC Wage Bill Rise by £5.5 Million Following Significant Job Cuts

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New research from The Global Payroll Association (GPA), reveals that HMRC has reduced its core workforce by –3.8% in the past year, but that this staff cut has led to such a reliance on overtime that the wage bill has actually increased by £5.5m.

The Global Payroll Association has analysed the changing number of full-time jobs at His Majesty’s Revenue & Customs (HMRC) between March 2023 and March 2024* and analysed the impact that this has had on the organisation’s overall annual paybill.

The research shows that HMRC has reduced its full-time equivalent positions by –3.8% in the past year, with the number of jobs falling from 67,469 in March 2023 to 64,875.

The most drastic job cuts have been made in the administration department, with the number Administration Assistants and Administration Officers falling by -9.3% on the year.

The number of Executive Officers has fallen by -5.4% and the number of Senior Executive Officers and Higher Executive Officers has been cut by -0.7%.

One would imagine that by reducing the overall number of full-time positions by 2,594, HMRC’s annual staff pay costs would also have reduced.

But closer analysis reveals that the organisation’s paybill has actually increased over the past year, rising by £5.5m, or 2%, to hit a total of £285m.

This increase in salary costs has been driven by a remarkable increase of 45.2% in overtime costs.

This suggests that HMRC has reduced its workforce to such an extent that handling day-to-day operations is no longer possible and, as such, the organisation is having to pay through the nose for staff overtime in order to get the job done.

As ridiculous as it seems, HMRC’s sweeping job cuts, intended surely to reduce running costs, have resulted in even more taxpayer money being spent.

Melanie Pizzey, CEO and founder of the Global Payroll Association, says: “HMRC is a publicly-funded operation. This means that, just like all other government-funded departments and organisations, it has been required to reduce its running costs at a time when public money is in scarce supply.

“As the central department for payroll and tax governance in the country, one would hope that HMRC knows how to efficiently handle its running costs and even more so its staff payroll. But instead, they’re showing us how to get payroll management completely and utterly wrong.

“A business has got to be on top of its payroll processes to ensure this sort of situation doesn’t arise where staff are spread so thin that the workload cannot be successfully managed and an apparent cost-saving activity actually results in costs going up due to the wild expense of overtime pay.

“It’s also important to consider additional impacts of poor payroll management, not least staff morale among a team who have seen their numbers slashed and their workload become unsustainable within normal working hours.”

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