UK tax collection system to get major overhaul

The government has published HMRC’s Transformation Roadmap, which includes a significant overhaul of its systems to make it easier for UK taxpayers to manage and pay their tax.

The first change announced as part of this roadmap is today’s introduction of a new online Pay As You Earn (PAYE) service available to around 35 million taxpayers.

The new service will make it easier for PAYE taxpayers to check their income, allowances, reliefs and expenses through the HMRC app or their personal tax account.

As part of its roadmap, HMRC aims to become a digital-first platform and have 90% of customer interactions taking place digitally by 2030.

It sets out more than 50 IT projects, services, and measures that aim to simplify the UK’s tax and customs systems for consumers and introduce improvements enabled by technologies such as artificial intelligence.

AI is a cornerstone of HMRC’s digital transformation roadmap, with the service aiming to introduce AI in the following areas:

Automating call summaries for HMRC advisers and caseworks and providing these roles with internal chat assistants.
Creating AI-powered digital assistants to help customers navigate HMRC services.
Developing an automated AI-powered system for identifying fraudulent documents.
HMRC will allow third-party service providers to use AI systems that interact with its own platform.

HMRC also announced that it will save £50 million a year by moving customer letters and reminders to a digital-first approach by the 2028 to 2029 tax year. It added that paper post provision will remain for critical correspondence and for those without access to its digital platforms.

Leveraging its £1.7 billion in funding announced at the Spending Review 2025, HMRC aims to fund an additional 5,500 compliance and 2,400 debt management staff. It will also allocated an additional 400 people to tackle wealthy offshore tax non-compliance.

“We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers,” said Exchequer Secretary to the Treasury James Murray.

“By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.”