Corporate report

HMRC performance update 2025 to 2026: quarter 2

Published 13 November 2025

Purpose and priorities

HMRC’s core purpose is to bring in the revenue that funds the UK’s public services and ensure the customs system supports the smooth flow of trade at the border. Alongside our work to reduce the cost of administration for businesses and improve compliance, this helps create the conditions to support economic growth.

Our priorities are to close the tax gap, improve day-to-day performance and the customer experience, and drive reform and modernisation of the UK’s tax and customs system. These priorities are embedded in our strategic objectives, and we are working hard to deliver them, while acting with integrity, empathy and fairness in line with our HMRC Charter standards and Civil Service values.

Close the tax gap

Our compliance work contributed to record tax revenues of £875.9 billion in 2024 to 2025 - an increase of 3.9% on the previous year - and we bring in around 95% of the tax that’s due, according to the latest tax gap estimate (5.3% for 2023 to 2024). In 2024 to 2025 we collected and protected £48 billion of tax that would have gone unpaid if HMRC hadn’t stepped in (known as ‘compliance yield’), up from £41.8 billion the previous year and exceeding our target of £45.4 billion. In 2025 to 2026, our target is £50.4 billion and between July and September we brought in £5.8 billion of compliance yield, giving a year-to-date total of £15.1 billion. With most compliance yield often delivered towards the end of the financial year, this is in line with the usual trends.

Investments announced by the government, combined with policy reforms, will help us close the tax gap and deliver £7.5 billion of additional tax revenue, per year, by 2029 to 2030. As well as enabling us to modernise our systems, this investment means we can recruit and train an additional 5,500 new compliance caseworkers. We are on track, having recruited over 1,200 additional full-time-equivalent compliance staff so far. As part of the 2024 Budget investment, we have also been able to retain around 1,200 current debt management staff until March 2030, and a further 1,200 debt management staff are due to be recruited from 2026 to 2027 onwards.

To tackle the most serious tax crime, between July and September 2025, our criminal investigations enabled 125 positive charging decisions and 51 prosecutions to be brought.  Recent investment will allow us to further strengthen our counter-criminal technology and intelligence management.

The total debt balance was £43.8 billion at the end of September 2025, compared with £44.8 billion at the same point in 2024. Meanwhile, tax debt as a proportion of total tax receipts fell from 5.2% in 2023 to 2024, to 5.0% in 2024 to 2025 and we are determined to reduce it further.

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

More customers are getting a better service by using our digital services to manage their tax affairs and resolve issues - without having to wait on the phone.

Between July and September 2025, for example, 79.6% of customer interactions with HMRC were through automated or digital self-serve channels (up from 76.9% for the same period in 2024 to 2025) and 82.9% of respondents said they were either satisfied or very satisfied after using them. There have been 76.8 million customer sessions on our highly rated HMRC app so far in 2025 to 2026, with over 650,000 new users added between July and September 2025. You can download the HMRC app following these instructions.

Customers value our online services because they’re simpler, faster and available around the clock. We’re continuing to expand the range of digital services we offer, aiming for more than 90% of customer interactions to be through automated or self-serve channels by 2029 to 2030. As more customers self-serve online, our advisers have more time to support those with complex queries or who need extra help.

Customers calling us have also been receiving a better service, with calls answered quicker in the second quarter of 2025 to 2026, compared to the same period 12 months ago. Customers waited, on average, for under 14 minutes in quarter 2, compared to over 18 minutes during the same period last year. Between July and September 2025, 83.8% of callers who wanted to speak to an adviser had their call answered, up from 72.9% for the same period in 2024. We were just below our service standard of 85% in quarter 2.

And customer response times for priority correspondence steadily improved throughout quarter 2.  Between July and September, 78.9% of customers were sent a response within 15 working days, up from 68.6% in quarter 1 and approaching our 80% service standard. By the end of the quarter, 87.0% of customers were sent a response within 15 working days.

Most customers continue to be satisfied with the service they are receiving from us. Satisfaction with our phone, webchat and digital services was 79.9% between July and September 2025. We met our 80.0% customer satisfaction target when looking over the first 6 months of 2025 to 2026. 

Reform and modernisation of tax and customs administration

To continue improving the customer experience and close the tax gap, we need to reform and modernise tax and customs administration - and we’re delivering changes all the time. For example, as promised in our Transformation Roadmap, customers can now pay the High Income Child Benefit Charge (HICBC) through PAYE, if they didn’t need to send a tax return for another reason, as of September 2025. To help customers prepare for the introduction of Making Tax Digital for Income Tax Self Assessment in April 2026, we have launched a new marketing campaign and will continue to use our own and our stakeholders’ channels to support customers through this change.

Over quarter 2, we have been driving forward with a number of projects to improve the services we offer to customers and make our IT estate more resilient and secure. For example, our work to procure a new enterprise customer relationship management capability will mean that customers increasingly receive relevant, accurate, and clear information tailored to their needs. We are also investing in how we store and connect our data. By bringing together previously disconnected datasets, our teams will be able to build more effective risk models which will support our compliance work. These and other key projects are currently on track, and we will explain our progress in our Annual Report and Accounts

We are also future-proofing our services by using fewer, more efficient and cost-effective IT platforms to build and adapt products more quickly. Over half of our services and underlying IT have been either decommissioned or moved from on-site servers to secure cloud hosting, helping us to build and run more resilient services that can be supported and updated more easily - and scaled up quickly to meet peaks in demand.

We also continue to explore the potential of artificial intelligence (AI), for example, by combining AI and interactive design to enhance HMRC’s Online Trade Tariff service. This will better support traders as they look for opportunities to grow their business through imports and exports.

We’re collaborating closely with partners and customers to make sure the changes we’re introducing will help to create a tax and customs system that works better for everyone. Our Transformation Roadmap, published in July 2025, outlines our ambitious plans to modernise and reform tax and customs administration and we will report progress in HMRC’s next Annual Report and Accounts.

Supporting wider government economic aims through HMRC’s work

As the UK’s tax and customs authority, we play an essential role in ensuring the customs system supports the smooth flow of trade at the border, helping to deliver economic growth. The Transformation Roadmap sets out our ambitions to develop a more automated and integrated customs system over the next 5 years, including enhancements to the Customs Declaration Service and the Goods Vehicle Movement Service. We are working with other government departments to deliver on the government priority of EU alignment for sanitary and phytosanitary (SPS) checks. 

We also want to ensure that everyone follows the rules and protect the tax and customs system from those who seek to exploit it, and our enforcement activity helps support wider government economic aims by levelling the playing field for businesses and protecting individuals. We do this, for example, by improving compliance with Money Laundering Regulations in the sectors for which we are responsible, and issuing financial penalties for those who don’t comply, and enforcing the National Minimum Wage on behalf of the Department for Business and Trade. We report on our performance annually in the Annual Report and Accounts.