The UK government has unveiled an innovative digital service designed to revolutionise how approximately 35 million Pay As You Earn (PAYE) taxpayers manage their tax affairs.
Available only online through both the personal tax account service on GOV.UK and the official HMRC mobile app, this new service empowers individuals to conveniently review and modify details regarding their income, tax allowances, work expenses, and various tax reliefs.
By enabling taxpayers to independently manage their tax affairs through digital platforms, the service aims to eliminate many of the complexities traditionally associated with tax administration and dealing with often very basic requests from HMRC.
Why call a busy HMRC helpline, which operates only from Monday to Friday, when you can access their services online at any time convenient for you?
If it could save you time and energy it’s definately worth trying to use it the next time you have a tax related query.
The introduction of this platform marks just one component of HMRC’s comprehensive transformation roadmap, which encompasses over 50 distinct IT projects, services, and measures aimed at modernising the United Kingdom’s tax and customs infrastructure.
The digital transformation initiative promises to deliver substantial benefits for both taxpayers and the government. By transitioning from traditional paper correspondence to digital communications, HMRC anticipates annual savings of approximately £50 million by the 2028/2029 tax year.
HMRC highlights the importance of these savings stating that they’re the equivalent to funding nearly 1,500 full-time nursing positions within the NHS.
James Murray MP, Exchequer Secretary to the Treasury, said:
“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.
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.”
Transforming Tax Administration Through Digital Innovation
The newly introduced PAYE service exemplifies HMRC’s commitment to creating a more accessible and user-friendly tax system
This digital-first approach extends beyond mere convenience, representing a fundamental shift in how HMRC operates.
JP Marks, HMRC’s Chief Executive and First Permanent Secretary, said:
“The Government’s ambition is for a simpler tax and customs system and this roadmap sets out how HMRC will deliver a first-class experience that feels different to their customers.
By 2030, UK citizens will experience a tax administration system that is more automated, more focused on self-service, and better set up to get things right first time so they can fulfil their tax obligations.”
The organisation aims to automate tax processes wherever feasible and introduce self-service options across numerous tax regimes.
This strategic direction aligns perfectly with the government’s broader vision of establishing a simpler, more efficient tax and customs framework.
The transformation roadmap outlines HMRC’s journey towards becoming a thoroughly modern tax authority by 2030 with the ultimate goal of handling 90% of customer interactions through digital channels.
Harnessing Artificial Intelligence for Enhanced Tax Services
A cornerstone of HMRC’s modernisation strategy involves the strategic implementation of artificial intelligence across various operational areas.
This technology will play a pivotal role in helping taxpayers meet their obligations while enabling the department to monitor the tax system almost in real-time.
For HMRC advisers and caseworkers, AI capabilities will automate call summaries and provide internal GenAI Chat Assistants to support their daily activities.
Digital assistants powered by AI will help taxpayers navigate HMRC services more easily and facilitate timely updates to content and guidance on the GOV.UK platform.
In compliance operations, HMRC plans to deploy an automatic document identification system to help caseworkers detect fraudulent documents during investigations. This system will incorporate biometric likeness-liveness checks to enhance security and accuracy.
The department is also developing principles to guide third-party developers in implementing AI functionality within software that interacts with HMRC systems.
These guidelines will provide developers with confidence to incorporate AI features while minimising the risk of errors or non-compliance.
Current and Future Initiatives Under the Transformation Roadmap
Several measures outlined in the Transformation Roadmap are already being implemented during the current tax year.
These include expanding the SMS confirmation service to cover self assessment appeals, complaint cases, and selected PAYE services, as well as enhancing the self assessment registration process and streamlining the exit procedure for individuals who no longer need to file returns.
HMRC is also broadening its voice biometrics pilot programme to simplify customer verification when contacting helplines.
Future projects include:
- Digitalising the Inheritance Tax (IHT) service to create a modern, user-friendly system that simplifies the submission of returns and tax payments.
- A new service will allow employed parents who become liable for the high income child benefit charge (HICBC) to pay directly through their tax code without registering for self assessment.
- An enhanced reward scheme for informants is being launched, targeting information about serious non-compliance among large corporations, wealthy individuals, offshore activities, and avoidance schemes. This programme will compensate informants based on a percentage of recovered tax.
- A new service will enable agents to digitally submit information affecting their clients’ PAYE tax codes directly to HMRC.
You can find out more about HMRC’s on going plans in their recent press release.
Strengthening Compliance and Closing the Tax Gap
As announced in the Spending Review 2025, HMRC will receive £1.7 billion over four years to fund an additional 5,500 compliance staff and 2,400 debt management personnel. The investment aims to ensure more of the tax owed is collected to fund essential public services.
The department is particularly focused on addressing wealthy offshore tax non-compliance, with plans to assign 400 additional staff to work on related risks.
This team will include experts from private sector wealth management who will help identify and tackle non-compliance more effectively while training HMRC compliance staff.
In the 2023 to 2024 tax year, HMRC successfully collected 94.7% of the total tax due. The organisation recognises that those who meet their obligations and pay their tax on time should not be disadvantaged by the minority who fail to follow the rules.
Later this year, HMRC will provide updates on its plans to modernise behavioural penalties to incentivise timely tax payments by simplifying and strengthening the penalty system.
