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.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Blows £175m on Fancy AI Toy from Quantexa

 

HMRC Blows £175m on Fancy AI Toy from Quantexa – Because Nothing Says “We’ve Fixed Customer Service” Like Another Expensive Tech Fantasy

Morning, you long-suffering taxpayers still stuck on hold for an hour, waiting two years for a refund, or filling in quarterly MTD returns while HMRC’s own staff take half a million sick days.

In their latest act of breathtaking delusion, HM Revenue and Customs has just signed a 10-year, £175 million deal with British tech firm Quantexa. That’s £17.5 million a year of your money going on some AI-powered wizardry that’s supposedly going to magically transform the taxman from a national embarrassment into a sleek, efficient machine.

Quantexa’s system will hoover up HMRC’s data, mix it with external sources, and then – allegedly – help spot fraud, hidden company networks, and even “fix unintentional errors” faster. It’ll also supposedly assist customer service staff. Yes, the same customer service that’s been in freefall for years.

Let me translate the corporate bollocks into plain English:

HMRC admits their performance is so dire that public dissatisfaction is rising, so instead of fixing the basics — answering the bloody phone, processing refunds in less than 18 months, or stopping phantom £2.8 billion demands to corner shops — they’ve decided to throw £175 million at an AI system.

This is classic HMRC behaviour. Their IT track record is legendary for all the wrong reasons (remember Fujitsu? Horizon? The endless MTD delays?). Now they’re banking on AI to do what competent management and proper staffing have failed to do for over a decade.

Here’s what this shiny new toy will actually be brilliant at:

• Finding more ways to hammer small businesses and self-employed people for minor errors
• Spotting “suspicious” expense claims from sole traders earning £60k
• Building even bigger databases on every one of us
• Generating more automated penalty points

And here’s what it almost certainly won’t fix:

• The hour-long hold music torture
• Two-year refund delays
• Deadline day phone hang-ups
• Pension tax calculation cock-ups
• Trivial £47 demands to pensioners

£175 million. That’s enough to answer the phones properly for years. Enough to sort the backlog. Enough to give decent service to the people who actually pay their wages. Instead, it’s going on another grand “digital transformation” project that will probably end up costing double and delivering half while some consultants laugh all the way to the bank.

This is what happens when a failing organisation refuses to admit the problem is management, culture, and accountability — not lack of fancy tech.

Tax does have to be taxing.
But when HMRC spends £175 million on AI to “improve performance” while the basics remain an absolute disgrace, it’s not taxing — it’s institutional denial on an industrial scale.

Well done, JP Marks and the rest of the gang. Another shiny toy to play with while the public seethes.

Amazon “HMRC AI Overlords Survival Kit” Suggestions
(affiliate links – because you’ll need these while the robots come for your records)

• Tinfoil Hat – protect yourself from the all-seeing AI
• “Another £175m Down the Drain” Mug – morning tea essential
• Noise-Cancelling Headphones – for the inevitable longer hold times
• Heavy-Duty Shredder – in case the AI gets too nosey
• Strong Whisky – medicinal, after reading your next tax calculation

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"