HMRC’s Annual Report 2025/26

 

HMRC’s Annual Report 2025/26: Record Tax Haul, Shiny Digital Stats, But The Same Old Customer Service Shambles

HMRC has just dropped its 329-page annual report for 2025/26, and true to form, they’re out there blowing their own trumpet while the rest of us choke on the reality.

They collected a whopping £966.4 billion in tax — that’s £90.4 billion more than the previous year. Compliance yield smashed through £50 billion for the first time. Digital interactions are up to 78%. They’ve hired more compliance officers. Everything’s going swimmingly, right?

Bollocks!

Scratch beneath the glossy headlines and the strains are bleeding through everywhere. Yes, they’re raking in more cash (largely thanks to Reeves’ stealth taxes, frozen thresholds, and employer NI hikes) but the basics that actually matter to real people remain an absolute disgrace.

Customer service? Still in the toilet. They only managed to answer 85.1% of calls (one in seven went unanswered), with average wait times of over 12 minutes. They’re proudly pushing everyone towards webchats and the “highly successful” HMRC app while real human help remains a distant dream. This is the same department that hangs up on Self Assessment deadline day and harasses 93-year-old terminally ill veterans.

Tax debt sits at £44.7 billion. They’re resolving more of it, sure, but it’s still a monumental pile of unpaid tax while they chase pensioners for peanuts. The tax gap? Still hovering around £60 billion. Small businesses (the ones actually trying to grow) remain the biggest contributors to the gap — funny how that works when HMRC makes compliance such a nightmare.

R&D tax relief errors and fraud are so bad the accounts had to be qualified again. Yet they’re happy to sit on legitimate startup R&D claims for months, leaving businesses £95k out of pocket.

The transformation roadmap? More MTD misery, more AI toys (£175m with Quantexa), more digital-first bullshit while the phone lines stay broken and trust collapses. Only 70% of small businesses trust HMRC. For individuals it’s even worse, over half don’t trust them at all.

This report perfectly exposes the HMRC delusion: they’re getting better at squeezing more tax out of us, but utterly failing at basic service, fairness, and competence.

Tax does have to be taxing.

But when HMRC crows about record revenues and digital progress while the public endures endless delays, incompetence, and contempt? That’s not taxing — that’s institutional arrogance funded by your money.

Well done on the big numbers, lads. Now try answering the bloody phone.

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