Corporate report

HMRC's annual report and accounts 2025 to 2026: Executive summary

Published 9 July 2026

Foreword from the Exchequer Secretary to 
the Treasury and Chair of the HMRC Board

Revenue and Customs’ Annual Report and Accounts for 2025 to 2026 once again highlights how the work of this department underpins the government’s central mission of economic growth and national renewal. And the figures in this report speak to the vital role HMRC plays in funding our public services and giving financial support to those who need it. This year, the department raised £966.4 billion in tax revenues and paid out £13.4 billion in Child Benefit — all while working to ensure a fair system where everyone plays by the same rules and where those who seek to avoid or evade their responsibilities are held to account.

HMRC’s work is enabling the government to rebuild our public services, help families with the cost of living and fund schools, hospitals and communities — the building blocks of a fairer, more prosperous society. I know that HMRC’s staff are focused on delivering for our country and I want to record my thanks to everyone in the department for their continued dedication and professionalism.

Good tax and customs administration might not always make the headlines, but it matters profoundly to people’s everyday lives. When HMRC gets things right, businesses can invest and trade with confidence, workers receive the support they are entitled to and families can plan for the future. When we collect the taxes that are owed fairly and efficiently, we enable the investment in public services that communities across the country depend upon, which is why it’s so pleasing to see the progress HMRC has made this year. This report, along with the recently published Transformation Roadmap update, highlights the important work going on to address the three priorities set to meet the government’s vision for a modern tax system: improving day-to-day performance, closing the tax gap, and reform and modernisation of the tax and customs system.

Progress is being made towards creating a tax system that works better for everyone. A tax system that is more digital and easier to use for businesses and individuals alike, freeing up time and resources that can be put to more productive use. And over the longer term, smarter tax and customs administration supports economic renewal, by helping to create the conditions for businesses to thrive and grow.

I am also encouraged by the progress HMRC has made in improving customer service this year. More people are getting through to an adviser when they need help and calls have been answered more quickly. There is, of course, further to go. I know that too many people still find dealing with HMRC frustrating, so I am determined that the department continues to build on the improvements made this year. The public rightly expects a tax and customs authority that is efficient, responsive and fair — and that is what HMRC is working to deliver.

As Chair of the HMRC Board, I will continue to provide oversight of the department’s delivery against its three strategic priorities. These priorities are the foundations of a tax system that commands public confidence — one that supports honest taxpayers, tackles non-compliance effectively and enables HMRC to attract and retain the talented people it needs.

The coming year will bring new challenges. The demands on public finances are significant, but this government is relentlessly focused on reversing decline and restoring opportunity, pride and faith that the future will be better. I am confident that HMRC is well placed to continue enabling and supporting the government to deliver the necessary changes and build an economy that works for all.

I look forward to working with the department as we make further progress on this vital mission in the year ahead.

Dan Tomlinson MP
Exchequer Secretary to the Treasury and Chair of the HMRC Board

Foreword from HMRC’s Chief Executive and First Permanent Secretary

HMRC’s core purpose is to collect the money that pays for the UK’s public services and to provide financial support to those who need it. Around 40 million individuals and 5.7 million businesses across the UK are HMRC customers, and we are striving to be a trusted, modern tax and customs and valuations department. We have much to deliver between now and 2030 and I’m grateful to my teams and our partners for the progress made in year 1 of our 5-year transformation, as set out in this report and in our latest transformation roadmap update.

In 2025 to 2026, we raised tax revenues of £966.4 billion, an increase of £90.4 billion compared to the previous year and brought in over £50 billion of compliance yield for the first time — money that without our intervention, would have been lost to the Exchequer. This helps us to keep the UK’s tax gap — the difference between tax collected and theoretical tax liabilities — amongst the lowest in the world. Our priority is to reduce the tax gap by 2030, with annual yield expected to increase by a further £10 billion, and receipts also forecast to grow further. To do this, we’re employing innovative new technologies and capabilities, and have increased the number of compliance colleagues by over 2,100 since Autumn Budget 2024. We are ahead of our plan to grow compliance capacity by an additional 5,500 new frontline compliance officers by 2030.

Meanwhile, tax debt as a proportion of receipts is also now forecast to fall in each year of the Spending Review period. We’ve resolved almost £102 billion of debt in 2025 to 2026, an increase of 5.3% compared to the year before. We’re helping customers to pay what they owe and taking action on those who choose not to, ensuring a fair tax system for all, consistent with the update to our Debt Strategy, which we published in 2025. We expect tax debt as a proportion of receipts to fall from 4.7% in 2025 to 2026, to between 3% and 4% by 2029 to 2030.

Our work on reducing the tax gap is underpinned by efforts to enhance our customer service, and in 2025 to 2026 we focused on improving our day-to-day performance and customer experience. By 2030, our ambition is to be a digital-first organisation, with customer-focused services that are accessible and easy-to-use, supported by modern and secure technology, to help our customers get their tax right first time.

In 2025 to 2026, 78% of all customer interactions were digital — up from 65% five years ago, which shows we’re well on the way to reaching our target of at least 90% by 2030. Much of this digital shift has been driven by our highly successful HMRC app, which celebrated its 10th anniversary in June 2026, and continues to grow. Over 7.6 million people used the app in 2025 to 2026, an increase of 28.6% in the last year.

The app has evolved from a simple tax calculator 10 years ago into a powerful tool that can be used for a variety of transactions. In the month of January 2026, £818.8 million of Self Assessment payments were made via the HMRC app, up 64% on payments made during January 2025. Our app even ended 2025 to 2026 as the number one rated free finance app in the App Store and Google Play store for the first time.

We know that in recent years, our customers haven’t received the experience they expect from our telephony services, but I recognise the substantive progress made this year. More customers are getting through to us, and for the first time since 2017 to 2018, we met our headline telephony performance target in 2025 to 2026 — with 85.1% of customers who wanted to speak to an adviser having their call answered. Those customers are waiting less time to speak to us too. The waiting time to speak to an adviser halved comparing March 2025 to March 2026 — when it dropped below 10 minutes for the first time in over four years. This is now the baseline that we must build on.

In 2025 to 2026 we laid the foundations for further improvements to our customer service. We will continue investing in technology to give our colleagues the tools they need to provide a faster and more consistent service. Our Contact Centre as a Service platform, for example, announced in May 2026, will give us a next generation, AI-enabled contact centre solution. We have also started procurement for our Enterprise Customer Relationship Management tool, which will make it easier to provide a joined-up and consistent experience for our customers, however they have contacted us. Both will go live in phases, starting in 2026 to 2027.

Tax and finances can be stressful, which is why we have continued to provide additional or tailored support for those who need it. Our customer service advisers and compliance caseworkers are trained to recognise individual needs and provide the right guidance, and in 2025 to 2026, around 210,000 customers received extra support. I’m also pleased that we are doubling our commitment to grant funding for the voluntary and community sector. As our digital ambitions progress, this will ensure that charities and community organisations can offer free and independent tax and benefits advice to digitally excluded and vulnerable customers.

Our efforts to improve the customer and colleague experience are grounded in the work we’re doing to reform and modernise tax and customs administration, as set out in our Transformation Roadmap update. In April 2026, for example, we introduced Making Tax Digital (MTD) for Income Tax, whereby sole traders and landlords earning over £50,000 will have a clearer view of their tax position. Over 180,000 customers had signed up for this service by the end of March, with many more expected to register before the first quarterly reporting deadline in August. In the Autumn Budget 2025, the government also announced the introduction of e-invoicing, working with industry experts to develop technical frameworks that will support improved tax compliance and business efficiency.

Artificial intelligence (AI) and advanced analytics has already enabled the protection and recovery of £10 billion in tax between 2025 and 2026, and we are continuing to work at pace in this area, appointing our first ever Chief AI Officer in April 2026, to provide clear leadership and ensure the AI advancements that we make are responsible. Throughout the year I have been focused on redoubling our commitment to the HMRC Charter. This has meant engaging our stakeholders by working in the open, using their valuable experience and insight to help improve the services we offer and I’m grateful for their contributions. MTD for Income Tax, for example, was co-designed with partners, using first-hand experience to create a system that makes it easier for people to get their tax right first time.

Amid this transformation however, criminals continue to seek to target our systems, customers, and colleagues — and we remain alert to these risks. In 2025 to 2026 we blocked around 23.35 billion potential IT security threats, 99.95% of which were automatically handled by our defences. Meanwhile, we are vigilant to the growing risk of fraud and scams, taking down over 26,000 scam websites and social media accounts impersonating HMRC over the same period.

We will not be complacent in this landscape, we will continue working to improve our technical health, safeguarding our IT infrastructure by addressing cyber vulnerabilities and ensuring secure data management. Our technical health maturity score — which assesses the overall condition and resilience of our technology systems and infrastructure, based on regulatory frameworks — stands at 3.3 out of 5 and we aim to reach 4.0 by 2030.

We also take insider risk very seriously, where a small minority of colleagues, contractors or suppliers may misuse their access to data and systems. We have a zero-tolerance approach to this and, where criminal wrongdoing is identified, we take swift action to dismiss and pursue criminal prosecutions. Fraud training packages are now mandatory for everyone in HMRC, regardless of role.

Our work throughout 2025 to 2026, continued to support the government’s wider economic aims. In 2025 to 2026, over £1 trillion of goods imports and exports crossed the UK border and we facilitated the smooth flow of this trade, with further transformation to come. We’re using AI and other technologies, for example, to redesign the Online Trade Tariff tool and make it easier for traders to understand their customs obligations.

We also welcomed over 4,000 Valuation Office Agency (VOA) colleagues into HMRC in April 2026, who enable the collection of billions of pounds in business rates and Council Tax in England and Wales each year, directly funding local public services.

Our progress in 2025 to 2026 is testimony to the efforts of HMRC colleagues across the country, and I want to thank them for their work over the past twelve months — including during the Self Assessment deadline, which fell on a Saturday in January 2026. Over 800 colleagues were ready to help customers get the guidance they needed through our phone lines, and 200 webchat advisers provided support online. We look forward to replicating these improvements next year too, including on Self Assessment deadline day, which falls on a Sunday.

Our people are central to our transformation and our continued investment in skills development and capability academies is paying dividends. Colleague engagement increased to 60% in the 2025 People Survey, which is a 3 percentage point increase on the previous year and the highest in HMRC’s history — something I am proud of and hope we can build on.

We are also determined to build new capabilities, learning from risks and issues. Through the HMRC Charter, we’re committed to getting things right for our customers, and that’s why we continuously learn and improve, be open and honest about our actions and use lessons learned to develop new and robust approaches.

Following the fraudulent access to our PAYE services by organised criminals using stolen personal data, in 2025 to 2026 we used learnings from the incident to set up the Fraud Prevention Centre, a new operational model that uses technology and empowers our people to detect, address and prevent identity fraud. We deployed this capability across our tax regimes this year, including containing repayment fraud losses in VAT.

We also recognised that our attempts to protect taxpayers from error and fraud negatively impacted some of our Child Benefit customers. Apologising for this, we took swift corrective action to put cases right and improve our processes, continuing to fulfil our vital role in giving individuals and families financial support, while reducing error and fraud in Child Benefit. We are aware that improving trust, particularly for individual customers, remains a key challenge and we are determined to keep improving our services, so customers can make more informed choices, from accessing time to pay arrangements online, to being able to view National Insurance records so they can make voluntary payments.

We will continue to publish annual updates on how our services are changing and be open about our progress on delivering modernisation and reform. I am grateful to my colleagues and our partners for their leadership, delivery, and support in 2025 to 2026. I hope we can build on this and accelerate progress in the years ahead.

John-Paul Marks
Chief Executive and First Permanent Secretary, HM Revenue and Customs

1 July 2026

2025 to 2026: our performance highlights

Our purpose and vision

HMRC is your tax service. Our purpose is to collect the money that pays for the UK’s public services and give financial support to people. Our vision is to be a trusted, modern tax and customs department that delivers in line with our values, which are: being professional, acting with integrity, showing respect and being innovative.

Our charter standards

The HMRC Charter sets out the standards
our customers can expect when interacting with us and the experience we want to deliver.

The Charter commits us to:

• getting things right
• making things easy
• being responsive
• treating customers fairly
• being aware of customers’
personal situations
• recognising that customers can appoint someone to represent them
• keeping customers’ data secure

Strategic Objective 1: Close the Tax Gap

6.4% Provisional Tax Gap 2024 to 2025

£50.2 billion Compliance yield delivered 2025 to 2026

Over 1,600 New compliance officers joined us in 2025 to 2026

4.7% Debt as a proportion of receipts 2025 to 2026, down from 5.0% in 2024 to 2025

Strategic Objective 2: Improve day-to-day performance and the overall customer experience

85.1% Percentage of adviser attempts handled, up from 71.5% in 2024 to 2025

12:35 Average wait time for telephone calls (mm:ss), down from 18:38 in 2024 to 2025

79.4% Customer satisfaction in 2025 to 2026

78.0% Digital interactions, up from 76.2% in 2024 to 2025

£818.8 million Self Assessment payments made via the HMRC app, up 64% (January 2026 against January 2025)

Strategic Objective 3: Reform and modernisation of tax and customs administration

£10 billion Tax protected and recovered through the use of AI and advanced analytics

97 million Unique records in the new Central Customer Registry — providing a holistic view of the customer

10,450 Customers signed up for public testing of Making Tax Digital for Income Tax

Strategic Objective 4: Build a high-performing organisation with a skilled and engaged workforce

60% People Survey Employee engagement index score

47,000 Colleagues who completed an AI learning module

83 Civil servants who have taken part in the ‘Leadership Within the Enterprise’ programme

Strategic Objective 5: Supporting wider government economic aims

£8.0 billion Expenditure on Research and Development reliefs in 2025 to 2026

868,000 Families supported through tax free childcare

62,000+ Workers identified as underpaid, through our work to enforce the National Minimum Wage

How we were organised in 2025 to 2026

In 2025 to 2026 our department was made up of 5 core customer-focused groups, supported by corporate services, as set out below.

Our departmental group had 70,456 full-time equivalent employees at the end of financial year 2025 to 2026, 66,416 in HMRC and 4,040 in the VOA. The VOA became the Valuation Office in April 2026 having been successfully integrated into HMRC.

Our core customer-focused groups

Customer groups	Purpose of customer group
Customer Services	Supports customers to pay the right tax and get the right benefits and helps those who have built up debt to pay what they owe
Customer Compliance	Ensures the right tax is paid and intervenes when there is a risk of that not happening
Borders and Trade	Supports UK international trade and the collection of taxes and duties on imports, working closely with Home Office Border Force
Customer Strategy and Tax Design	Develops and delivers policy reforms to the UK tax system to support government priorities, underpinned by high quality customer insight and analysis and working closely with HM Treasury
Valuation Office Agency	Executive agency which provides property valuations to support taxation and benefits and undertakes valuations for the public sector

Our corporate services

Corporate service	Purpose of corporate service
Change Delivery Group	Leads on some of HMRC’s largest and most complex change programmes
People and Place Group	Develops and oversees implementation of HR policies that make HMRC a great place to work, with overall responsibility for our workforce planning, recruitment, talent management, estates and learning activities
Chief Finance Officer Group	Includes our finance and commercial functions, as well as banking services provided to HMRC and other government departments
Chief Digital and Information Officer Group	Designs, develops and runs digital and information services for our people and our customers, while ensuring we hold data in a way that is secure and meets legal requirements
Enterprise Transformation Group	Responsible for driving HMRC to realise its vision, deliver its purpose more effectively and to change faster - ensuring that organisational strategy and ministerial policy is delivered
HMRC Legal Group	Provides legal services to HMRC