HMRC announces its Transformation Roadmap of changes for the future.

HM Revenue and Customs (HMRC) plays a crucial role in collecting the funds that support public services. This responsibility is central to the government’s plans to invest in the country, stimulate economic growth, and deliver the Prime Minister’s vision for change.

Since its formation 20 years ago, the tax and customs environment has evolved significantly. The government is committed to creating a tax and customs system that meets future needs—one that is straightforward, where managing taxes fits smoothly into how individuals and businesses operate.

The government envisions a future where everyday tax and customs tasks require minimal effort thanks to simpler processes, advanced technologies like artificial intelligence (AI), and enhanced digital self-service options. This will help most taxpayers comply easily, reducing accidental errors. For the small number who deliberately evade taxes, HMRC will act quickly to detect and penalize wrongdoing.

As part of this transformation, the Valuation Office Agency (VOA), which plays a key role in property taxation in England and Wales, will be integrated into HMRC by April 2026. This merger will increase flexibility, speed up reforms, and contribute to administrative savings of 5 to 10% by the end of the current spending review. It will also improve services for taxpayers and support government commitments to reform business rates and modernize taxation.

The government is investing approximately £7 billion annually over the spending review period to lay the foundation for these ambitions. HMRC will also achieve £773 million in efficiency savings by 2028-29. The Exchequer Secretary to the Treasury has set three clear priorities for HMRC during this time: improving everyday performance and customer service, closing the tax gap, and reforming and modernizing the tax and customs system.

This roadmap outlines the steps HMRC will take to meet these priorities and describes the changes customers can expect. It also explains how HMRC will collaborate more closely with partners and stakeholders to deliver these improvements, connecting short-term actions to the government’s longer-term vision for tax and customs administration.

Improving Day-to-Day Performance and Customer Experience

HMRC is expanding digital self-service tools to give customers greater control over their tax affairs, allowing routine tasks to be completed online or via the app, reducing the need for calls or letters. In 2024-25, nearly 20 million people used their Personal Tax Account digitally, and 10 million used the Business Tax Account. HMRC’s app consistently ranks among the UK’s top finance apps, with around 6 million users in that year.

By 2029-30, HMRC aims for at least 90% of all interactions to be digital—up from about 76% today. Services will be expanded and enhanced with new features, including easier, more secure logins, AI-powered assistants, voice biometrics, and personalised digital experiences to help customers manage their tax more easily.

HMRC is committed to supporting digitally excluded or vulnerable customers and those with complex tax situations by providing tailored help and access to advisers. All services will continue to meet the HMRC Charter standards throughout this period.

Closing the Tax Gap

Currently, the tax gap—the difference between taxes owed and those collected—stands at 5.3%. While most taxpayers try to pay correctly, complex tax situations can lead to honest mistakes. However, HMRC is also tackling intentional under-reporting and tax avoidance.

HMRC is investing in staff, technology, and data to improve compliance and recovery. AI and third-party data will help identify risks and automate reminders, encouraging accurate tax payments. The government has funded 5,500 new compliance officers trained with better tools to detect and address non-compliance, and 2,400 new debt management officers focused on collecting outstanding debts more effectively.

Specialist teams are being increased to target wealthy and offshore tax evaders, working internationally to disrupt those who facilitate hidden income. HMRC will also ramp up counter-fraud efforts, aiming to increase prosecutions of major fraud cases by 20% over five years, including fraud by wealthy individuals and large companies.

Efforts to support small businesses include digital improvements, better use of data, and raising standards for tax advisers, who will be required to register securely with HMRC to enhance oversight of the tax advice market.

Reforming and Modernising the Tax and Customs System

To keep pace with evolving needs, HMRC will modernise its core IT infrastructure, investing heavily in AI, data analytics, and new platforms to improve security, efficiency, and real-time insight into taxpayers’ affairs and risks.

Tax rules and reporting requirements will be simplified to help customers understand their responsibilities more easily.

HMRC will collaborate with other UK government bodies and devolved administrations to share data and trial new digital initiatives, including AI-powered guidance on GOV.UK and cross-border credential sharing pilots with US Customs.

Looking Ahead: A Future Vision

The government aims to create a trusted tax and customs system that integrates seamlessly with how individuals and businesses operate, using familiar systems and processes.

Transformation will continue beyond the current spending review, exploring innovations such as accounting software integration and expanding AI use to guide customers, detect non-compliance, and streamline staff work. HMRC applies strict ethical controls and follows government AI policies to ensure responsible technology adoption.

As the wider economy becomes more automated, HMRC will work with tax advisers, software developers, and financial sectors to ensure technological advances improve both compliance and customer experience.

Delivering Change Effectively

The Prime Minister has urged the Civil Service to deliver faster, more productive improvements, and HMRC is responding by incorporating expert oversight and external challenge.

HMRC is shifting to a model of frequent, smaller, user-tested updates rather than long, large-scale projects. This approach will allow quicker service enhancements and faster benefits for customers.

Stakeholder consultation will increase, including collaboration with agents, software providers, and other government departments, to share best practices and coordinate efforts.

The roadmap includes clear commitments and measurable targets to track progress transparently.