Corporate report

HMRC performance update 2026 to 2027: quarter 1

Published 13 August 2026

Purpose and priorities

HMRC’s core purpose is to collect the money that pays for the UK’s public services and provide financial support to people 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, customs and valuations department.

Our priorities are to close the tax gap, improve day-to-day performance and the overall customer experience and to reform and modernise tax and customs administration. These priorities are embedded in our strategic objectives, along with building a high-achieving organisation with a skilled and engaged workforce and contributing to the government’s economic aims, such as enabling growth. We are working hard to deliver them, while acting with empathy and integrity in line with our Charter standards and Civil Service values. We have a lot to do between now and 2030, but we’re making good progress — as set out in our recently published Transformation Roadmap Update.

Close the Tax Gap

In 2025 to 2026, we raised tax revenues of £966.4 billion, an increase of £90.4 billion compared with the previous year. And we generated more than £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 the revenue we should collect (assuming everyone is compliant) and what we have actually collected — amongst the lowest in the world.

Government investment will help us to increase annual compliance yield by a further £10 billion by 2030, and receipts are also forecast to grow. This year we aim to again increase our compliance yield and for at least a quarter of it to come from work focused on stopping non-compliance before it happens, rather than correcting it afterwards.

To support us in closing the tax gap, the government announced a series of measures enabling the delivery of £10 billion of additional tax revenue per year by 2029 to 2030. These measures include significant investments to modernise our systems and recruit and train 5,500 new compliance caseworkers and additional supporting lawyers, analysts and policy experts. Over 250 additional compliance staff joined us between April 2026 and June 2026, bringing the number of new compliance colleagues to more than 2,400 since Autumn Budget 2024.

To tackle the most serious tax crime and protect revenue for the exchequer, between April 2026 and June 2026, our criminal investigations enabled 82 positive charging decisions (where independent prosecuting authorities have authorised the charging of an individual), and 63 prosecutions during this period. We are strengthening our ability to detect and stop fraud, to increase the number of annual charging decisions for the most harmful fraud to 600 per year by 2029 to 2030.

We are targeting criminals who are using high street shops as a front for tax evasion, money laundering and fraud. Following the Chancellor’s announcement at Budget 2025, we have recruited a new team of 350 criminal investigators to tackle evasion by small businesses, and the first quarter of 2026 to 2027 saw us work closely with partners including Home Office Immigration Enforcement colleagues, Westminster Council Trading Standards and the Metropolitan Police, to make unannounced visits to a variety of high street business premises.

We resolved almost £102 billion of debt in 2025 to 2026, an increase of 5.3% compared to the year before. And tax debt as a proportion of total tax receipts fell from 5.0% in 2024 to 2025 to 4.7% in 2025 to 2026. Government investment has allowed us to retain around 1,200 existing debt management colleagues until March 2030 and recruit a further 1,200 debt management staff by the end of 2028 to 2029. In 2025 to 2026 we accelerated our plans, recruiting 540 additional colleagues to help us collect as much debt as we can, as quickly as possible. November’s update to our tax debt strategy shows how we expect tax debt as a percentage of receipts to fall to between 3% and 4% by 2029 to 2030. The total debt balance was £42.8 billion at the end of June 2026, compared with £42.6 billion at the same point in 2025. 

Improve day-to-day performance and the overall customer experience

Our work to reduce the tax gap is underpinned by efforts to improve our customer service, while accelerating our transformation. We have made tangible progress in improving service standards, with more customers managing their tax affairs and resolving problems digitally — without having to call or write to us. 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. Between April and June 2026, overall customer satisfaction was 78.6%, with 81.1% of customers satisfied or very satisfied with our digital services.

There were 158.8 million customer sessions on the HMRC app in 2025 to 2026, with more than 2.8 million new users. There were 144 million Personal Tax Account sessions and 48 million Business Tax Account sessions. Download the HMRC app, or sign in / set up a Personal Tax Account or Business Tax Account.

As more customers interact with us digitally, our advisers have more time to support people who need to call us because they have complex queries or need extra help. In 2025 to 2026, 85.1% of callers who wanted to speak to an adviser had their call answered, meeting our 85% target for the first time since it was introduced in 2021 to 2022 — and marking the first time we had met our headline telephony target since 2017 to 2018. We continued to exceed this service standard in quarter 1 of 2026 to 2027, with 87.9% of callers getting through to an adviser.

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 — falling below 10 minutes for the first time in over four years. While March’s performance was exceptionally strong, it forms part of a wider improvement in customer waiting times. Between April and June 2026, customers waited on average 11 minutes and 35 seconds for their call to be answered, compared to over 13 minutes in the same period of 2025.

Correspondence performance data for April, May and June 2026 is currently undergoing quality assurance checks. We intend to provide updated correspondence performance in September.

Whilst we have made progress, we know there is still more to do to consistently provide the level of service all customers expect. We are continuing to improve how we deliver our services, by strengthening our technology and building momentum behind our transformation. This will allow us to address the longstanding challenges in the tax system and deliver simpler, faster and more effective services in the future.

Reform and modernisation of tax and customs administration

We continue to deliver changes to how tax, customs and valuations are administered. In April 2026, for example, we successfully launched Making Tax Digital (MTD) for Income Tax — the most significant change to the Self Assessment system in more than 30 years and a major milestone in the modernisation of the tax system. To support HMRC’s ambition to reduce error and make tax administration more effective, efficient and easier for customers, more than 860,000 sole traders and landlords with qualifying income above £50,000 were required to begin using compatible software to keep digital records from 6 April and the first quarterly updates were submitted to HMRC by 7 August.

To make it easier for us to provide a joined-up and consistent experience for customers — however they contact us — we are developing a next generation, AI-enabled Contact Centre as a Service platform. We are also procuring a new Enterprise Customer Relationship Management capability — to replace legacy systems with cloud‑based platforms that provide a 360-degree view of the customer journey. Both of these projects will go live in phases, with some elements being delivered in this financial year. We will be using a new approach through PATH (which stands for Pioneering Advanced Technologies for HMRC) to accelerate our transformation and achieve outcomes faster.

In May 2026, we took further steps to protect taxpayers from fraudulent or unqualified tax advisers, by introducing a single registration process, requiring advisers to meet minimum standards before they can interact with HMRC on behalf of their clients. As well as strengthening security, mandating tax adviser registration enables us to establish the foundations for a single, reliable view of agents and their client base.

Meanwhile, we also continue to work with HM Treasury to shape policy that supports reform and modernisation of the tax and customs system. On 23 June, for example, we published our Tax Update 2026 — a package of 41 measures that included a call for evidence on Customs Modernisation to capture industry views on trade digitalisation, as well as Digitalisation and AI Customs Pilots to test and scale successful innovations.

Contributing to the government’s economic aims

We play an essential role in supporting economic growth, whether that’s by delivering targeted tax reliefs — towards research and development, for example — or through initiatives like our new Advance Tax Certainty Service (ATCS), which gives businesses more confidence and understanding of how tax rules will apply to them before committing to major new investment projects. We also continue to ensure the customs system facilitates the smooth flow of trade. In 2025 to 2026, over £1 trillion of imports and exports crossed the UK border, with 98.9% of customs declarations selected for documentary checks cleared within 2 hours. Between April and June 2026, that figure was 99.4%.

We successfully updated the New Computerised Transit System on 1 June 2026. This enables the UK to continue meeting its international legal obligations under the Common Transit Convention and maintains the transit customs facilitation, allowing businesses to move goods through various customs territories with minimal Customs interventions.

On 1 April 2026, the Valuation Office (VO) became part of HMRC, bringing the two organisations together to improve services to the public. Responsible for setting Council Tax bands for 27 million homes and business rates valuations for 2.1 million commercial properties across England and Wales, the VO helps raise over £60 billion a year to fund local public services.

We are focused on improving performance, including delivering quicker outcomes and faster decisions for customers. In the first quarter of 2026 to 2027, we were within 1% of meeting the VO’s statutory deadlines for Non-Domestic Rating (NDR) checks within 12 months and challenges within 18 months. Over the same period, 87% of business rates checks were completed within three months and 41% of challenges resolved within 12 months — both in line with the VOs plan to meet its new commitments for business rates. Looking further ahead, we are working to provide more modern, digital property valuation services that are quicker, clearer and easier to use, making the most of new technology, data and artificial intelligence to deliver a better experience for customers.

Summary

Our quarter 1 2026 to 2027 performance demonstrates continued progress as we build on the foundations laid in the first year of our five-year transformation programme. While services have improved, we recognise that some customers still experience delays and friction. We remain committed to resolving these issues as quickly as possible and will continue to work openly with our partners to build trust and deliver further improvements for our customers.