Reliance on third party software is increasing as HMRC strives to deliver on in its transformation roadmap and become a digital-first organisation. In recognition of this, HMRC is exploring how the current standards for tax software can be strengthened and upheld in a way that “makes it simpler for customers to meet their obligations, offers fair competition between providers, and supports a healthy, effective tax and customs system”.  

Scope and timeline 

Following initial discussions with software providers and other interested parties, HMRC has published a policy paper setting out the strategic direction and expectations for strengthening software standards. The paper explains that all third-party software providers whose products integrate with HMRC’s application programming interface (API)-based available services will initially be in scope of the strengthened standards.  

Engagement, including discussion, testing and evaluation, will continue throughout 2026 and 2027 before the transition period is confirmed in mid to late 2027.  

Strengthening the standards 

HMRC has identified the following five themes that it says will shape the future development of software standards:  

• Product integrity: the software must be “demonstrably accurate” to “prevent avoidable errors at source, rather than relying on downstream correction after inaccuracies have affected customers”. 
• Supporting correct outcomes: in-product prompts and design approaches that reduce the risk of misinterpretation “will actively support compliant behaviour and reduce user error”.
• Data accountability: improved access to data and visibility of user actions and system events will help support HMRC’s compliance activities.   
• Error management: mechanisms to detect and correct errors will “minimise customer harm and reduce the tax gap”.
• Misuse and fraud prevention: identifying and reducing opportunities for misuse and abuse will support “HMRC’s wider efforts to tackle organised and persistent non-compliance”. 

HMRC says that the five themes are not “exhaustive or finalised” and are “intended to guide discussion and engagement”. 

Upholding the standards 

HMRC says that the strengthened standards “will be upheld in a way that is proportionate, risk-based and aligned with HMRC’s wider approach to intermediaries”. HMRC will look to build on existing controls and will align its activities with its wider work on software provider registration (see below).  

The strengthened standards may include “clearer expectations for senior leaders [working within a software provider] on management and oversight”.  

Wider picture 

HMRC’s work on strengthening standards for software providers is part of the government’s vision of “a thriving software market supporting an effective, healthy tax and customs system”, as explained in a separate policy paper. This is to drive the following outcomes: 

• better customer experience;
• improved accuracy and compliance; and
• a thriving and innovative market. 

The paper sets out a multi-year programme of reform across the following five strategic priorities: 

• Partnership and collaboration.
• Innovation and integration.
• Assurance and oversight.
• Customer empowerment.
• Technical environment and integration readiness. 

Key themes for HMRC to explore under these priorities include: 

• opportunities and guardrails for using artificial intelligence (AI) in tax software. In January 2026, HMRC published guidance for developers on what good use of generative AI looks like in tax software;
• devising commercial routes for features without commercial benefit, “including novel and compliant procurement methods”, to allow for the development of features that deliver value for HMRC but not necessarily for software providers;
• introducing unified registration for software providers whose products interact with HMRC’s systems; 
• ensuring smoother switching of taxpayer data between software products; and
• establishing an API innovation portal to improve opportunities for co-creation with software providers. More detail is provided in a separate paper on HMRC’s external integration approach.