What does the government’s vision mean for taxpayers?
HMRC’s recently published Transformation Roadmap (the Roadmap) highlights three priorities and the plan to deliver those priorities, which unsurprisingly are:
- Improving day-to-day performance and overall customer experience.
- Closing the tax gap.
- Reform and modernisation of tax and customs administration.
Increased use of technology and artificial intelligence features in the delivery of all three priorities. Taxpayers will be expected to move towards more regular digital record keeping and automation, and this is expected to reduce the scope of making errors.
In the next year, HMRC is expecting to enhance case management systems, such that documentation issued to taxpayers through HMRC compliance activity is integrated. It is anticipated that this will improve efficiencies and could reduce the length of time it takes for HMRC to complete a compliance check. This will be welcome news for taxpayers and their advisers.
Technology and artificial intelligence are also expected to be utilised heavily to identify suitable cases for investigation. Whilst this may improve case selection if it is targeted at those taxpayers deemed to be at higher risk of making errors, it may also result in a higher number of compliance checks for taxpayers and their advisers to deal with.
It has been known for some time that the government has provided HMRC with funds to recruit and train an additional 5,500 new compliance colleagues and 2,400 debt officers over the next five years. However, the Roadmap provides further detail on this, outlining that the government is investing in the Tax, Customs and Compliance Academy and an enhanced Criminal Justice Academy, and these academies will start to train more than 21,000 people in the next year. Although there is a time lag in these individuals being fully productive, this is a significant investment in improving HMRC compliance activities with a view to reducing the tax gap.
Last year it was estimated that 5% of the tax gap was attributable to wealthy customers, who often have complex financial and tax affairs. It was therefore outlined that to build wider capability and harness insight into this group of taxpayers, HMRC will be looking to recruit external tax professionals with experience of providing international tax or wealth planning advice to high-net-worth individuals.
It was announced at the Spring Statement 2025 that HMRC will expand its counter fraud capability and will seek to increase the number of annual criminal charging decisions for tax fraud by 20%. The roadmap explains that these criminal investigations will focus on:
- Fraud committed by the wealthy and through large corporations.
- Individuals and companies who make it possible for others to hide money offshore.
- Those who undermine legitimate trade and small business.
- Organised criminal attacks, focusing on illicit finance and complex money-laundering.
This in part will be achieved by the enhanced reward scheme for information, which is due to be launched in late 2025. The new scheme will reward informants linked to a percentage of any tax taken based on the information they provide.
The above measures are just a handful of those outlined in the Roadmap. They do however provide a clear indication that taxpayers and advisers should expect a greater level of scrutiny from, and interaction with HMRC.