On July 21, 2025, HM Revenue and Customs (HMRC) released its Transformation Roadmap, a £7 billion-a-year plan to modernise the UK’s tax and customs system by 2030. Aimed at achieving 90% digital interactions, closing the 5.3% tax gap, and delivering £773 million in efficiencies by 2028-29, the roadmap promises a digital-first tax authority with AI-driven compliance and simplified processes.
Championed by Exchequer Secretary James Murray MP, it includes over 50 IT projects, new online services, and 7,900 additional staff. However, HMRC’s long history of underperformance, from botched IT rollouts to poor customer service, casts a shadow over these lofty goals. Below, we analyse the roadmap’s strengths and weaknesses, grounding our assessment in HMRC’s well-documented failures to deliver on past promises.
The Good: Aspirations Amid Scepticism
1. Digital-First Vision
The roadmap’s goal of 90% digital interactions by 2030, anchored by a new online Pay As You Earn (PAYE) service for 35 million taxpayers, aims to streamline tax management via the HMRC app and Personal Tax Account. AI-driven nudges to prevent errors during tax submissions could reduce compliance burdens for honest taxpayers. If successful, this could align with global trends toward digital tax systems. However, HMRC’s track record—such as the troubled 2016 Making Tax Digital (MTD) rollout, plagued by delays and software glitches—suggests execution will be a challenge. The Low Incomes Tax Reform Group (LITRG) welcomes the digital focus but warns that digital exclusion risks leaving vulnerable taxpayers behind, a problem HMRC has repeatedly failed to address adequately in past digital initiatives.
2. Tackling the Tax Gap
The roadmap’s commitment to closing the 5.3% tax gap (2023-24) by hiring 5,500 compliance officers and 2,400 debt management staff, supported by AI tools, targets an additional £7.5 billion in annual revenue by 2029-30. Measures like cracking down on offshore evasion and increasing fraud charging decisions by 20% sound promising. Yet, HMRC’s history of ineffective enforcement—evidenced by the 2019 Loan Charge debacle, which misjudged contractor tax schemes and led to widespread hardship—raises doubts about its ability to implement sophisticated AI-driven compliance without errors or unfair outcomes. Past overzealous pursuits have often alienated taxpayers rather than recovered revenue.
3. Simplification and Stakeholder Engagement
Simplifying tax processes and integrating the Valuation Office Agency (VOA) into HMRC by April 2026 could streamline property tax administration. Collaborating with tax advisers and software providers, alongside requiring adviser registration, aims to raise standards. The roadmap’s use of operational sandboxes to test services is a nod to private-sector innovation. However, HMRC’s past attempts at simplification, like the 2010 Real Time Information (RTI) system, were marred by errors that frustrated employers and delayed compliance. Stakeholder engagement has often been superficial, with groups like the Bonded Warehousekeepers Association noting HMRC’s tendency to consult but ignore feedback.
4. Support for Vulnerable Taxpayers
The roadmap pledges to maintain phone and in-person support for digitally excluded or vulnerable taxpayers, a critical nod to inclusivity. But HMRC’s customer service record is abysmal—2023 saw average call wait times of 25 minutes, with 10% of callers hanging up before reaching an agent. Promises of accessible support ring hollow when HMRC has consistently failed to resource helplines adequately, leaving taxpayers stranded during peak filing periods.
The Bad: A Legacy of Failure Looms Large
1. Unrealistic Ambitions
The 90% digital interaction target by 2030 is ambitious but ignores HMRC’s history of overpromising and underdelivering. The 2005 merger of Inland Revenue and Customs Service promised modernisation but led to years of chaos, with lost records and delayed refunds. The roadmap’s reliance on over 50 IT projects is daunting, given HMRC’s track record of botched IT implementations—like the 2018 MTD for VAT rollout, which overwhelmed small businesses with compliance costs. X posts from users like @DavidMenziesCA highlight scepticism about HMRC’s capacity to deliver complex digital infrastructure on time or within budget.
2. Scrapping MTD for Corporation Tax
HMRC’s decision to abandon MTD for Corporation Tax (section 5.2) is a glaring misstep, signalling a retreat from digital modernisation. This move, noted on X by @TaxProUK, has left businesses uncertain about future compliance requirements. HMRC’s failure to propose a clear alternative echoes its mishandling of MTD’s phased rollout, which saw multiple delays and scope reductions since 2016. This decision undermines confidence in the roadmap’s digital vision and suggests HMRC is already backtracking on key commitments.
3. Over-Reliance on AI
The roadmap’s heavy bet on AI for compliance, nudges, and debt management assumes technological reliability that HMRC has rarely achieved. Past attempts at tech-driven solutions, like the 2014 Connect system for risk profiling, led to false positives and unfair penalties for compliant taxpayers. As @StuartMaggs on X notes, the roadmap’s AI focus, wrapped in vague jargon, risks oversimplifying complex tax issues. Without transparent safeguards, AI could amplify errors, especially given HMRC’s poor data management history, as seen in the 2007 loss of 25 million child benefit records.
4. Workforce and Cultural Inertia
Hiring 7,900 new staff sounds impressive, but HMRC’s chronic understaffing and high turnover—evidenced by a 15% vacancy rate in 2022—suggest challenges in recruitment and retention. The roadmap’s admission that it “will not always get everything right first time” is a candid but worrying acknowledgment, given HMRC’s pattern of prolonged disruptions, like the 2020 Self-Assessment portal outages that delayed filings. Cultural resistance to new systems, as seen in slow staff adoption of RTI, could further derail progress.
Reality Check: Can HMRC Break the Cycle?
HMRC’s *Transformation Roadmap* offers a compelling vision but is haunted by decades of mismanagement. From the 2007 data breach to the 2019 Loan Charge controversy and ongoing customer service failures, HMRC has consistently struggled to execute ambitious reforms. The roadmap’s goals—digital transformation, tax gap reduction, and simplification—are laudable but hinge on overcoming entrenched inefficiencies. The abandonment of MTD for Corporation Tax and vague AI plans suggest HMRC may already be setting itself up for failure. Stakeholders, including LITRG and X users like @TaxProUK, demand transparency and regular progress updates, but HMRC’s history of poor communication offers little reassurance.
To succeed, HMRC must break from its past by prioritising robust project management, genuine stakeholder input, and realistic timelines. Without these, the roadmap risks becoming another chapter in HMRC’s saga of unfulfilled promises, leaving taxpayers and businesses to bear the cost of delays and errors. For now, the roadmap is a high-stakes gamble—one that HMRC’s track record suggests it is ill-equipped to win. Taxpayers await proof that this time will be different.
Tax does have to be taxing.
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If you compared this against one written twenty years ago, would it look any different? No. Transformation, Closing The Tax Gap, Customer First.
ReplyDeleteHMRC is still run by bullshitters and empire builders in their lunch break fiefdoms. They're the ones that wrote this and spend all day forwarding emails, going to meetings having tea, jaffa cakes with an egg and cress platter of sandwiches .
I hope Reform gets elected and they shut HMRC once and for all.
Tick Tock