HMRC published its transformation roadmap in July 2025, explaining how it would achieve the following priorities set for it by the government: 

• improving day-to-day performance; 
• closing the tax gap; and 
• reforming and modernising the tax and customs systems. 

It has now published an update, setting out the progress made in meeting those objectives over the last year.  

HMRC service performance 

HMRC’s intention is to become a digital-first organisation, with at least 90% of its interactions with taxpayers and agents taking place digitally by 2030. The update reveals that HMRC is making good progress towards this target.

HMRC says that it is committed to “offering a fully inclusive customer support model that caters for all”. The update notes that HMRC answered calls more quickly in 2025-26 than in 2024-25, and it sets out the actions that HMRC will take to improve its handling of calls and post in 2026-27. HMRC’s annual report and accounts for 2025-26, which is expected to be published shortly – should provide further information on HMRC’s recent service performance.   

The update also reports on progress made by HMRC in 2025-26 in meeting its roadmap commitments to launch new services and improve existing ones. Key commitments that have been met include the roll out of a new online service for all pay as you earn (PAYE) taxpayers and enhancements to the child benefit service, allowing eligible taxpayers to pay the high-income child benefit charge through PAYE.  

Closing the tax gap 

The tax gap is the difference between what HMRC expects the total tax receipts to be and the actual tax received. As explained in a recent article, the latest estimate of the tax gap is £59.2bn (6.4% of total tax liabilities) for 2024-25. This is up from £52.8bn (6%) for 2023-24. HMRC explains that “the tax gap is a backward-looking measure so does not yet reflect more recent changes in policy, performance or investment”.  

The update sets out the work done by HMRC over the last year to close the tax gap, including helping taxpayers to avoid errors and encouraging them to pay their tax in full, on time. The update also reveals that HMRC is on track to recruit an additional 5,500 compliance officers by 2029-30, with over 1,600 compliance officers joining in 2025-26. 

Reform and modernisation 

The government’s intention is that, by 2030, “HMRC will be an agile department supported by a modern IT infrastructure, using innovative technology and AI, with robust data capabilities, and a highly skilled workforce”. 

HMRC says that it made progress in 2025-26 in: 

• “improving how customers and intermediaries interact with HMRC”, for example, by launching Making Tax Digital for income tax from April 2026; and 
• “simplifying the tax and customs administration framework so it is fit for the future”. Some of the changes were announced earlier this month, as part of Tax Update 2026, and are explained in an earlier article.   

The update also makes clear the government’s commitment to “harnessing the power of AI to create a simpler, more automated tax system”. Work done in 2025-26 includes issuing over 28,000 Microsoft Copilot licenses to HMRC staff to help with “drafting and summarising documents and emails and summarising meetings”. Looking ahead, “HMRC will continue to explore the use of new AI tools to automate and streamline administrative tasks”. 

Services for agents 

In the July 2025 roadmap, HMRC said that it had worked with professional bodes to identify areas – “pain points” - where HMRC’s digital services were “not yet good enough to enable advisers to efficiently and effectively help customers comply with their obligations”. HMRC said it would prioritise this work in 2025 and set out the work needed to address those pain points.

The update to the roadmap reveals that HMRC has worked with professional bodies to explore potential solutions to the pain points, and that feasibility and delivery planning work on these areas will continue in 2026-27.

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