Corporate report

Executive Summary: HMRC's Transformation Roadmap

Published 21 July 2025

1. Introduction

HMRC’s Transformation Roadmap announced by XST James Murray MP

HM Revenue and Customs (HMRC) has a vital purpose – collecting the money that funds public services. This work plays a pivotal role in the government’s ambitions to invest in our country, grow the economy, and deliver the Prime Minister’s Plan for Change.

Since the department was created 20 years ago, the tax and customs landscape has changed considerably. The government is determined to build a tax and customs system that is fit for the future, and its long-term ambition is for a simpler tax and customs system in which interactions, services and fulfilment of tax obligations fit seamlessly into the way that customers run their lives and businesses.

The government’s vision is for everyday tax and customs tasks, processes and compliance to happen with minimal effort thanks to simplified tax processes, the application of new technologies such as artificial intelligence (AI) and more digital self-serve options for customers. This will mean compliance is easy for the majority who want to get their tax and customs duties right, minimising opportunities for inadvertent errors. For the minority who are deliberately non-compliant, HMRC will take swift action to identify and penalise them.

As part of this ambition the Valuation Office Agency (VOA) will be integrated with HMRC by April 2026. The VOA plays a pivotal role in the property tax system of England and Wales, and moving the VOA’s functions into HMRC will provide greater flexibility and support the government to deliver change more quickly. As well as delivering 5 to 10% of savings in administrative costs by the end of the spending review period, this will improve the experience of taxpayers and businesses and support the delivery of the government’s commitments to reform business rates and modernise the tax system.

The government have invested around £7 billion per year over the spending review period – investment that will establish the critical foundations for its ambition for HMRC and that will begin to make this ambition a reality. HMRC will also become more productive by delivering a further £773 million of efficiencies by 2028 to 2029. During the spending review period, the Exchequer Secretary to the Treasury has set 3 clear priorities for HMRC: improving day-to-day performance and the customer experience; closing the tax gap; and reforming and modernising the tax and customs system.

This roadmap details the actions that HMRC will take to achieve each of these priorities and the changes that customers can expect to see. It also sets out how the department will deliver change differently, in close collaboration with partners and stakeholders across the tax and customs system, and it puts shorter-term changes in the context of the government’s longer-term vision for tax and customs administration.

You can find a summary of the detail in the roadmap below or you can read the detailed specifics in the full HMRC Transformation Roadmap

2. Improving day-to-day performance and the customer experience

HMRC is designing and delivering more digital self-serve options for customers, enabling them to have greater control over their tax affairs and complete routine tasks online or in the app without needing to call or write. In 2024 to 2025 19.7 million customers interacted digitally with their Personal Tax Account and 10 million customers used the Business Tax Account. HMRC’s app is regularly in the top 5 finance apps in the UK and in 2024 to 2025 had approximately 6 million users.

The department will become a digital-first organisation with a minimum of 90% of interactions undertaken digitally by 2029 to 2030. This will be an increase from around 76% currently. HMRC will expand the range and type of online services it provides across tax regimes to customers and intermediaries whilst ensuring that its services meet the HMRC Charter standards. The HMRC app and online tax accounts will be the first point of contact for most customers, with new functionality and added features.

These online channels will be accessed through the introduction of a more straightforward and secure login process and enhanced by new AI powered assistants, voice biometrics and personalised digital experiences that make it easier for customers to navigate their tax affairs.

Digitally excluded customers, as well as customers in vulnerable circumstances or who have complex tax affairs, will continue to receive targeted support and be able to speak with an adviser if they need advice. HMRC is committed to ensuring services for these customers meet the Charter standards over the period of the spending review.

This video demonstrates to customers how we are making managing tax easier with the HMRC app and online services:

Managing your tax is easier than ever with the HMRC app

3. Closing the tax gap

The tax gap stands at 5.3% based on the most recent data from 2023 to 2024 and the government is determined to reduce it. The vast majority of customers try to get their tax right. This can be made more difficult if their tax affairs are complex, leading to honest errors and careless mistakes. However, there has also been an increase in cases where taxpayers deliberately under-report or hide their income and manipulate tax rules.

To make it easier for customers to get their taxes right and for HMRC to recover money owed to the governments of the United Kingdom, HMRC is investing in its people, services, standards and technology. AI and third-party data will improve identification of compliance risks and the actions needed to prevent them. This includes greater use of AI analytical tools to assess risks and to provide automated nudges to help customers pay what they owe.

The government has agreed extra investment for 5,500 new compliance officers who will work with improved tools and receive training to identify those at risk of non-compliance, recovering more of the money owed. The government is also investing in 2,400 more debt management officers, who will work to reduce the debt balance by using targeted debt collection activities towards those who can pay but choose not to, and by automating processes to collect lower value debts.

HMRC is bolstering its efforts to root out wealthy and offshore tax evasion with hundreds of expert officers being recruited to focus on high-risk cases, collaborating internationally to target the agents, accountants and lawyers who enable others to hide money offshore.

Stronger measures will also be introduced to counteract fraudulent activity including offshore evasion and ‘phoenixism.’ As announced at Spring Statement 2025, over the next 5 years HMRC will expand its counter-fraud capability to increase the number of annual charging decisions for the most harmful fraud by 20%, compared to current levels, to 600 per year by 2029 to 2030. This increase will include frauds committed by the wealthy and through large corporations.

HMRC will improve the service it provides to small businesses, whilst addressing non-compliance where it occurs. Given the diversity of small business taxpayers, HMRC is taking a multi-faceted approach to address the small business tax gap through digitalisation, use of third-party data, and improving standards in the tax advice market.

New standards will come into effect for intermediaries operating in the tax and customs system, including the requirement for tax advisers to register with HMRC via an updated, secure process. This will provide HMRC with an improved understanding of these groups, their clients and how they operate.

4. Reform and modernisation of the tax and customs system

Reforming and modernising how HMRC operates will set the department up to adapt to future changes to the tax and customs landscape.

To improve customer experience and close the tax gap HMRC needs to reform and modernise the fundamental infrastructure of tax and customs administration. Over the spending review period, HMRC will overhaul its legacy IT infrastructure and invest heavily in AI, data capabilities and new platforms that increase the security and efficiency of HMRC’s operations and provide an improved picture of a customer’s tax affairs and compliance risks closer to real-time.

HMRC will also simplify and modernise the tax administration framework, with a focus on simplifying tax rules and reporting thresholds, making it easier for customers to understand their liabilities.

HMRC will work with other UK government departments and devolved bodies to share data and trial processes with the potential to improve its services. This includes embarking on joint AI and digital initiatives, including the development of new AI assistants for GOV.UK guidance and a credentials sharing pilot with U.S. Customs and Border Protection.

5. A future vision for the tax and customs system

The government’s ambition is for a trusted tax and customs system that fits seamlessly into the way that taxpayers run their lives and businesses, making use of systems and processes customers already use.

To achieve this, transformation of HMRC and the wider tax and customs system will continue beyond the next spending review period.

HMRC will continue exploring the benefits of emerging innovations in payments and finance infrastructure, such as improvements to accounting software which integrate into systems that customers already use.

The department plans to increase and expand its use of AI to target compliance activity, guide customers to the right advice, follow up on the minority that have not paid the right tax, and empower colleagues to work more effectively. HMRC is making use of machine learning and Generative AI to streamline administrative tasks such as summarising customer calls. HMRC will continue to adopt AI responsibly, applying its established ethical and safety controls, ensuring alignment with government AI, technology and accessibility frameworks, and HMRC’s Charter standards.

In an increasingly interconnected and automated digital economy, it is not just HMRC that is adopting new technology; individuals, businesses, and intermediaries will be adopting it as well. As stewards of the tax system HMRC wants to ensure that these changes genuinely improve customer experience and compliance.

HMRC will develop future plans in partnership with key stakeholders including tax advisers, software developers and the banking and payments sector. HMRC will continue its regular dialogue with these groups to consider the potential for technology to transform the tax and customs system, identifying any barriers or challenges.

6. Delivery

How transformation takes place is important. The Prime Minister has challenged the Civil Service to go further and faster to deliver a productive and agile state and HMRC is rising to that challenge. The Exchequer Secretary, as Chair of the HMRC Board, has brought in experts to assure and challenge HMRC on its transformation, and placed an emphasis on the benefits of external challenge.

HMRC will also fundamentally shift its approach to change delivery across the tax and customs system. Against a clear strategic roadmap and strong corporate standards, there will be a move away from longer-term, larger-scale programmes and into a model of delivering regular, iterative, user-tested changes, allowing for service improvements to be rolled out more quickly, enabling customers to gain more immediate benefits.

Changes will be developed and delivered in greater consultation with stakeholders in the wider tax and customs landscape including agents and software developers. HMRC will also work with other UK government departments and devolved bodies to join up on similar work and share best practice. This roadmap includes commitments and metrics that HMRC will transparently measure progress against.