A number of measures were announced during the Autumn Budget 2025 to close the ‘tax gap’. This is the difference between the amount of tax that should, in theory, be paid to HMRC, and the amount that is actually paid.

Several of these measures focused on HMRC’s available powers in targeted areas.

What was announced in Autumn Budget 2025?

The six most interesting initiatives are outlined below.

Targeted criminal interventions

When the tax gap figures were reported earlier this year, small businesses were the largest component by customer group, making up 60% of the tax gap. It is therefore not surprising to see targeted interventions aimed at small businesses.

The Chancellor announced that a new small business evasion and enforcement team will be established. This team will deploy 350 HMRC criminal investigators to carry out targeted interventions.

Rewarding informants

HMRC already rewards informants and reportedly paid over £850k to informants in the 2024/25 tax year. The Government announced rewards for informants of high-value tax fraud would be increased with immediate effect. For cases where tax over £1.5m is recovered, HMRC will now pay rewards of up to 30% of the additional tax collected.

Tackling rogue directors

The Spring Statement included a commitment to increase collaboration between HMRC, The Insolvency Service and Companies House to tackle contrived insolvencies and dissolutions.

The Chancellor announced an investment of £25m over five years will be made to recruit Insolvency Service staff to disqualify more rogue directors.

Targeting the construction industry scheme

The Government will strengthen HMRC’s powers to tackle fraud in the construction industry scheme. New legislation is expected to be implemented from 6 April 2026 giving companies within the scheme’s scope limited time to understand and adapt to the new requirements.

Investing in debt collection

Over the next five years £89m will be invested in additional staff to increase HMRC’s capacity to collect more tax debt.

Alongside the extra HMRC staffing, the Chancellor announced that the Government will invest £64m over the next five years in HMRC’s existing partnerships with private sector debt collection agencies.

If you receive a debt collection letter from a third party, it is important to check it is genuine as this type of fraud is common.

Changes to penalties

Penalties for non-compliance are being reviewed and amended.

The penalties applied to companies filing their tax returns late are doubling from 1 April 2026.

Other penalty regimes targeted at compliance inaccuracies or failures, are the subject of consultations. The Government intends to modernise.

These are just six of the measures announced to close the tax gap, with various consultations also announced. HMRC’s compliance activity clearly continues to be a focus for the Government.

For more information, please get in touch with Paul Marcroft, Olivia Wiggett or your usual RSM contact.

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