Corporate report

HMRC's external commitments: supplementary note

Published 9 July 2026

This supplementary note accompanies the HMRC annual report and accounts 2025 to 2026, providing a consolidated view of HMRC’s external Business Plan commitments and the progress made against them during the year.

Business Plan commitments and delivery

Publish HMRC’s Transformation Roadmap

In July 2025 we published HMRC’s Transformation Roadmap on GOV.UK, bringing together HMRC’s long term strategic and transformation ambitions alongside medium term deliverables and milestones into a single overarching document.

Increase our Compliance workforce to help close the tax gap

We have moved forward with the investment announced in 2024 to 2025 to recruit 5,500 additional compliance staff by 2029 to 2030. This recruitment is on track, with over 1,600 additional compliance officers joining us in 2025 to 2026, taking us up to a total over 2,100 so far. 

Deliver legislation to tackle non-compliance in the umbrella company market

To help protect our customers being caught up in tax avoidance schemes, the government has introduced legislation that comes into effect from April 2026 to stop the use of fraudulent umbrella companies.

Replace the Integrated Debt Management System with a cloud-based Customer-Centric Debt Collection Service

HMRC is modernising its debt management system by replacing its legacy system with the cloud-based Customer Debt Collection Service (CDCS). This will provide a single customer view of debt, improve automation, speed up resolution of cases and help to reduce the overall debt balance.

CDCS has already collected more than £1.4 billion in debt and key capabilities already delivered include new automated debt collection campaigns, better decision-making through advanced data analytics, smarter work allocation and automated links with Debt Collection Agencies.

During the second half of 2026 to 2027, we will deliver the capability to onboard all Self-Assessment debt from Making Tax Digital, migrating existing debt from the legacy system to CDCS.

Raise additional tax revenue following government investment at Budget 2024

Government investment to close the tax gap has allowed us to retain around 1,200 existing debt management colleagues until March 2030, and as committed to in the Transformation Roadmap, to recruit a further 1,200 debt management staff by the end of 2028 to 2029. In 2025 to 2026 we recruited 540 colleagues, helping us collect as much debt as we can, as quickly as possible.

Enable Voluntary Self Assessment Pre-Payment via the HMRC App

HMRC is committed to providing customers with a simpler way to budget for future tax bills through regular automated payments and clearer guidance, reducing the risk of unexpected year-end liabilities.

As part of modernising voluntary Self-Assessment prepayments through the HMRC app, we have recently launched a new Budget Payment Plans service, enabling customers to make voluntary tax payments in instalments ahead of the Income Tax Self-Assessment deadline. In its first 2 months, customers created plans worth more than £1 million.

From summer 2026 we will build on this service by adding forecasting functionality to help inform customers on the appropriate value of voluntary payments.

Agree proposals to raise standards in the tax advise market

We have mandated the registration of tax advisors who interact with HMRC from May 2026 which will shut out advisors not fit to action from interacting on a client’s behalf. We have set out intermediary standards through our published Strategic Approach to Third Party Software and Strategic Approach to External Integration.

Make it easier for customers to understand how much they owe and give simpler ways to pay

To give customers more flexibility and control when making tax payments, in March 2026, we launched the Budget Payment Plan service that enables customers to make voluntary weekly or monthly payments in advance of their next Income Tax Self Assessment return.

Looking ahead into 2026 to 2027 and beyond, we will further develop this service for individuals by introducing enhanced forecasting.

Develop and implement Automatic Exchange of Information (AEOI) between UK, EU and other tax states

The UK plays a leading role in international cooperation on tax transparency.

In 2025 to 2026, we received Common Reporting Standard (CRS) information relating to calendar year 2024 on over 11 million financial accounts from 104 jurisdictions. We analyse this alongside other data and intelligence that we hold and compare it with customers’ data. This deters non-compliance and helps us support customers to get their tax right, prompting those who may have got it wrong to correct any undeclared offshore tax.

We have secured £1.13 billion in compliance yield directly from international automatic exchange of information agreements since we first started receiving CRS data in 2016 to 2017.

Deliver a modern, digital system for customers Individual Savings Accounts (ISAs)

We have supported customers with ISAs by creating a modern digital reporting system for financial institutions operating ISAs, which will help to identify investors that have exceeded ISA limits more quickly.

In 2025 to 2026, we engaged the ISA industry to ensure that the new digital system is practical and user friendly, and we will learn from user feedback and testing to ensure it is ready for phased introduction by 2028.

Deliver a new registration, submission and exchange service to implement Crypto Asset Reporting Framework

In January 2026, the UK implemented the Organisation for Economic Co-operation and Development’s Cryptoasset Reporting Framework (CARF), with the extension of the rules to domestic reporting taking effect at the same time. 

UK cryptoasset service providers are now required to undertake due diligence and collect specified information on users and transactions and report it to HMRC annually. We will exchange that information on non-UK tax residents with relevant international partners and receive information from them on UK tax residents. This helps to improve tax transparency and reduce the risk of cryptoasset related tax non-compliance.

In 2025 to 2026, we published detailed guidance to support cryptoasset businesses and cryptoasset users in the UK, and we will continue to engage the industry directly through working groups, social media campaigns and direct technical support.

Transition towards digital customer service

Most interactions are already through our digital or automated services and we continue to expand and improve them, so that routine tasks are faster and simpler to complete.

Around 80% of our interactions with customers were through digital or automated channels in 2025 to 2026, building on the upward trend of recent years and helping us move towards our aim of at least 90% by 2029 to 2030.

Meet cross-government commitments to transition from Government Gateway to GOV.UK One Login

Individual customers who are new to HMRC can now access our digital services using GOV.UK One Login, which is a simple, joined up and secure way of accessing government services.

In line with the Transformation Roadmap, we will begin moving existing HMRC customers to GOV.UK One Login in phases, followed by agents and businesses, as services continues to expand.

Expand the repayments service to the majority of PAYE Repayments (P800) Service

The online PAYE service allows customers to more easily understand their tax position.

We have delivered changes to make it easier for PAYE customers to understand how much they owe, simpler ways to pay, and online services to help customers manage their tax liabilities so they can keep up with their bills. Customers can now use it to view information about their PAYE income, allowances, benefits and deductions, as well as a timeline of activity and information about employments and pensions. They can also add or end income sources and access detailed support and explainers.

Deliver whole system change to Making Tax Digital (MTD) for Income Tax

In April 2026, we rolled out MTD for Income Tax to sole traders and landlords with income over £50,000, which we committed to in the Transformation Roadmap. This followed extensive testing and engagement with customers and stakeholders. The launch was supported by a nationwide awareness-raising campaign and clear guidance published on GOV.UK to help customers understand the changes and prepare for the new requirements.

Implement Unique Customer Record (UCR) Programme

Our Unique Customer Record programme brings together data across HMRC. By the end of 2025 to 2026, we had consolidated previously separate data sources into 97 million unique records in the new Central Customer Registry, enabling us to view customer data across 54 different taxes, benefits and duties.

Digitise the Inheritance Tax (IHT) Service

We are designing the digital Inheritance Tax Service around clear and evidenced user needs.

Throughout 2025 to 2026, we worked closely with executors, agents, trustees and HMRC caseworkers to understand their requirements and the challenges they face. This included building and testing early prototypes with users to ensure the service is shaped by real feedback. This user-centred approach is guiding our technical design and will underpin the modern, fully digital service scheduled to launch from 2027 to 2028.

Modernise Customer Management Services, including Customer Relationship Management (ECRM) and Contact Centre as a Service (CCaaS) procurement

In May 2025, we began procuring a new, more modern, cloud-based contact centre platform to replace our legacy systems.

In July 2025 we started the procurement process for a new Enterprise Customer Relationship Management platform which will bring together a single, trusted customer record to support a more complete view of a customer’s interaction across HMRC.

Leveraging emerging tech and innovation (Artificial Intelligence (AI) and Innovation)

In 2025 to 2026, we issued 28,000 Copilot licenses to colleagues, leading one of the biggest roll outs of internal AI tools across government. Evaluation of our 2024 Copilot pilot estimated that it would save the average HMRC colleague around one hour a week. This is a capacity generating, net productivity benefit, of £50 million per year.

We supported our people by providing guidance and training through our Digital Academy, with around 38,000 colleagues completing AI focussed training. We created a new AI tool to support role playing in customer service training and MTD for income tax went live with AI enabled nudges via HMRC assist. An AI data competition was launched with No10 to invite suppliers to innovate with us on how to close the small business tax gap using AI and Gen AI chat bot trials were helped for both internal use on security as well as for use on gov.uk to support some HMRC queries.

Deliver and announce a package of measures on Tax Simplification

We have developed and announced a package of measures to simplify tax administration and improve the customer experience as part of the government’s 3 strategic priorities for HMRC.

In April 2025, the government published an update on simplification, administration and reform, announcing a range of measures, including 26 simplification measures to make processes easier for customers. This included simplifying how certain schemes operate, such as the Capital Goods Scheme and Spirit Drinks Verification Scheme.

The government also announced that the Income Tax Self Assessment reporting thresholds for trading, property and other taxable income would be aligned and changed to £3,000 each, by the end of the current Parliament — meaning an estimated 300,000 customers will no longer be required to file a tax return. Those with taxable income below these new thresholds will be able to report their income through a new digital reporting service.

Deliver the New Computerised Transit System (NCTS) Phase 6 Common Transit Convention

In September 2025, we successfully updated the New computerised Transit System, which enables the UK to continue meeting its international legal obligations under the Common Transit Convention (CTC) and maintains the transit customs facilitation. This allows businesses to move goods through various customs territories with minimal customs interventions, instead of requiring those movements to operate full import and export procedures for which the necessary infrastructure is not currently in place. Further updates to the system are due in Summer 2026.

Whilst we are focused on easing the burden on traders, the government has also committed to improving the business experience of the tax and customs system in its Regulatory Action Plan. This sits alongside the wider commitment to reduce regulatory burdens by 25% by the end of the Parliament. We are measuring business experience using our customer surveys.

Deliver critical requirements and improvements to the Customs Declaration Service (CDS)

We have improved the customer experience of using the CDS, by introducing new tools like the ‘Get Customs Declaration Data for Imports and Exports Service’, which allows traders and declarants to generate their own reports directly, saving them time and avoiding charges for HMRC-produced reports. We will continue to explore further improvements for customers in 2026 to 2027.

Develop, build an implement the Tax Credits Data Retention (TCDR) solution, following closure of Tax Credits

Work to deliver the TCDR has progressed during the year, during 2025 to 2026, key preparatory milestones were delivered including baselined business requirements and approved solution design.

The Amazon Web Server for TCDR was delivered April 26 and user screens are still being refined through sprints and show and tells. A delivery timeline in 2026 to 2027 remains on track, with funding agreements in place and strengthened planning across related workstreams.

Legislative work on unresolved cases is continuing through established governance routes, with substantial progress made. The target date for delivery of TCDR is March 2027, subject to user testing and acceptance, with full system decommissioning planned for 2027 to 2028.

In parallel, decommissioning activity delivered the permanent closure of Tax Credits renewals processes and payments, alongside the removal of 42 legacy functions, generating around £800,000 of annual running cost savings, with further closures expected later this year.

Implement Global Minimum Tax (Pillar 2)

The UK continues to play a leading role in updating the Inclusive Framework’s guidance and in co-ordinating administrative and compliance activity between tax authorities. HMRC has also provided support though guidance, webinars and mailboxes to multinational enterprises (MNEs) as they calculate their liabilities and prepare to file their first returns. 

Legislative amendments were introduced in Finance Act 2025, and further amendments will be made in the next finance bill to maintain alignment between UK law and the internationally agreed rules as they continue to evolve.  

Significant IT development has been undertaken to allow MNEs to file both UK tax returns and GloBE Information Returns (GIRs) in the UK. Relevant parts of the GIRs will be transmitted to tax authorities overseas under reciprocal arrangements so that the MNEs do not need to file GIRs in those jurisdictions. Due to changes to minimum taxes in other jurisdictions and to the way in which the Global Minimum Tax interacts with them, it is now expected that the increase in UK tax receipts will be around £1.7 billion per year by 2029 to 2030.

Pre-populate online High Income Child Benefit Charges for Self Assessment

In 2025 to 2026, HMRC completed development of the High Income Child Benefit Charge Self-Assessment pre-population solution and the supporting business readiness preparations.

The solution will be tested and deployed over this summer, enabling online Income Tax Self-Assessment returns to be pre-populated with Child Benefit data, reducing the likelihood of customer error and improving the accuracy of liability calculations.

Modernise CRS and Foreign Account Tax Compliance Act (FATCA)

During 2025 to 2026, we implemented preparatory system changes to support the introduction of new CRS reporting rules, which came into effect on 1 January 2026, with the first returns due in January 2027. This included updating systems to accommodate revised CRS and FATCA data formats, as announced in the Spring Budget 2024, which set out how financial information should be structured and exchanged between jurisdictions.

These preparatory activities have enabled us to focus 2026 to 2027 on the delivery of the services that internal and external users will use from January 2027.

Replace the Pensions Scheme Online Service with the Managing Pension Schemes service

We have replaced the Pensions Scheme Online Service with the Managing Pension Schemes service to modernise the administration of Pensions Tax Relief. This will make it quicker and easier for Pension Scheme Administrators to self-serve, make claims and fulfil all their pensions tax obligations, providing quality and more timely data for compliance purposes.

Reform agricultural property relief and business property relief on Inheritance Tax

Changes to Inheritance Tax announced at Autumn Budget 2024 have now been legislated in Finance Act 2026. Reforms to agricultural property relief and business property relief came into effect on 6 April 2026.

Changes to Inheritance Tax on pensions will be effective from 6 April 2027.

Implement policy change to mandate payrolling of Benefits in Kind

The government announced at Tax Update Spring 2025 that payrolling of benefits in kind would be introduced from April 2027, rather than April 2026, to provide businesses more time. We are continuing our work to deliver this.

Deliver Vaping Products Duty

Vaping Products Duty legislation was passed in March 2026, with the design for registration and approvals complete. Work is underway to deliver returns, payments and amendments, alongside the Vaping Duty Stamps to support compliance.

The Duty will introduce a flat rate excise charge on all vaping liquid from 1 October 2026. Alongside delivery, there is a strong focus on business and compliance readiness, including engagement with industry, enforcement planning, and ensuring systems and processes are in place to support effective monitoring and adherence from day one.

Registration and record management

In 2025 to 2026, HMRC established the strategic foundations for a more joined-up approach to registration and record management. This work sets the direction for how customer records are created and managed, with a focus on making services simpler, more consistent and more secure for users. This includes moving towards a single, unified customer record across services, alongside more standardised registration and subscription processes.

HMRC is also introducing more consistent approaches to identity verification and authentication, strengthening how fraud is prevented, and developing reusable services that can be used across different channels. Together, this will support better use of data to inform decision-making and improve the overall customer experience.

Design a data ingestion engine to capture and pre-populate Third Party data

Primary legislation is in place, with the necessary regulations planned for Autumn 2026. This is on track for implementation in 2026 to 2027 ahead of improved data sets being supplied by third parties and ingested in 2027 to 2028. The improved data will then be used from 2027 to 2028 onwards to help taxpayers get their tax right first time in a number of ways, including:

• pre-populating tax returns
• providing nudges and prompts for action where needed
• automatically registering some into tax regimes
• coding out tax from employees’ pay packets directly

Budget 2025 announced that HMRC’s use of this improved data will raise an additional £845 million in tax revenue in total by 2030 to 2031.