HMRC to Receive £500m for Digital Transformation
Major Investment to Digitise HMRC by 2030
In a major Spending Review announcement, the Chancellor has allocated an additional £500 million for HM Revenue and Customs (HMRC) over the next five years. The goal: transform HMRC into a digital-first tax authority, with 90% of all taxpayer interactions moving online by 2030. This represents a significant shift for both the tax authority and its users, with particular emphasis on overhauling the paper-based inheritance tax process.Summary of Planned Changes
- £500 million investment spread across five years
- Increase digital interactions from 70% to 90% by 2030
- Prioritisation of digitising key services, such as inheritance tax
- 24/7 access to digital services for individual and business taxpayers
- Faster response times and improved self-service
- Reduced administrative burden and wait times
- Cost savings for HMRC
- Greater accessibility for digitally confident users
- Potential challenges for users less comfortable with digital tools
- Uncertainty over how HMRC will manage the transition for vulnerable groups
This initiative builds on HMRC’s efforts to modernise its systems and improve efficiency for both staff and taxpayers.
How the New System Will Affect Taxpayers
According to the Spending Review Green Book, the Treasury believes this investment will improve service by making online interaction the default, thereby reducing the need for calls or written correspondence. Digital services will be available around the clock, removing many traditional time constraints on access to advice and information.While the Treasury has emphasised continued availability of telephone and postal support for those who need it, it remains unclear what measures will be taken to encourage digital adoption among all taxpayer groups.
Potential Benefits
Considerations and Concerns
What Key Stakeholders Are Saying
The Treasury commented:“Investing in digital transformation will improve the services HMRC can offer, shifting away from lengthy phone or post interactions. We will ensure that alternative channels, including phonelines, remain open for those that need them.”
The full details were included in the Spending Review Green Book, reflecting the government’s strategic priority for efficiency and service quality gains.
Looking Ahead: Steps for Taxpayers
As the project advances towards 2030, taxpayers and their advisers should:1. Review current digital skills and access needs
2. Monitor HMRC updates for pilot schemes or beta test opportunities
3. Engage with professional bodies for support in adapting to new systems
4. Stay alert to announcements regarding transitional arrangements for those who prefer non-digital channels
| Year | Percentage of Digital Interactions (Target) |
|---|---|
| 2024 | 70% |
| 2030 | 90% |
Final Thoughts
The new investment marks an ambitious step towards a digital-first future for UK tax administration. While the focus is on driving efficiency through online services, ensuring robust support for all user groups will be essential for a successful transition. Keeping abreast of these developments will be critical for businesses and individuals alike.