Child Benefit will be stripped from tens of thousands of people who have moved abroad in a major clampdown expected to save £350 million
A new specialist team is expected to stop over £350 million in Child Benefit fraud and error over the next five years.
The move follows a successful pilot where just 15 investigators stopped around £17 million in wrongful payments in under 12 months.
Thousands of people who left the UK but carried on claiming Child Benefit have already been removed from the system.
Child Benefit will be stripped from tens of thousands of people who have moved abroad in a major clampdown expected to save £350 million over the next five years.
A new specialist team will use international travel data to track if claimants have gone overseas, so are no longer entitled to the payments.
The move follows a successful pilot which has already removed 2,600 people from the system who had left the UK but continued to claim Child Benefit.
A team of just 15 investigators successfully prevented around £17 million being incorrectly paid out in under 12 months.
The government is rapidly expanding this highly effective unit as part of the Plan for Change. The new team will have over 200 people from next month, sending a clear warning to those trying to scam the system.
Cabinet Office Minister Georgia Gould said: “This government is putting a stop to people claiming benefits when they aren’t eligible to do so.
“From September, we’ll have ten times as many investigators saving hundreds of millions of pounds of taxpayer’s money.
“If you’re claiming benefits you’re not entitled to, your time is up.”
Child Benefit is paid to over 6.9 million families, supporting 11.9 million children. It is one of the most widely accessed forms of benefit in the UK and is administered by HM Revenue & Customs (HMRC).
If a claimant is outside the UK for more than eight weeks, Child Benefit payments may stop unless there are exceptional circumstances. Claimants must inform HMRC if they are outside the UK for this length of time or longer.
The pilot was carried out by the Public Sector Fraud Authority, the Home Office and HMRC. Under the Digital Economy Act, they matched a random sample of 200,000 Child Benefit records with international travel data.
Where the data suggested a claimant had left the country, specialist investigators from HMRC stepped in to perform their own checks before deciding whether benefits were being claimed incorrectly. The pilot was concluded in under 12 months and delivered savings of over one million pounds per investigator.
Alongside tougher checks, this renewed drive will raise awareness of the rules, recognising that some errors are genuine mistakes. Every case is reviewed by a human investigator and HMRC will reach out directly to families as part of any investigation to resolve matters swiftly.
This crackdown on fraud and error ‘protects hardworking families who play by the rules and ensures every pound of taxpayer money goes where it should’.
As teenagers get their exam results, parents are urged to renew their Child Benefit claim by 31 August for payments to continue in September
Parents can quickly and easily extend their Child Benefit claim via the HMRC app or online to guarantee their payments
Record numbers of parents of 16 to 19-year-olds staying in education or training have extended their Child Benefit online
With Scottish National and Higher exam results already known, HM Revenue and Customs (HMRC) is urging parents who know their teenager’s plans in September to extend their claim now to continue to receive Child Benefit.
More than 509,000 parents of teenagers, who are staying in full-time education or approved training, have already extended their Child Benefit claim. A record-breaking 67% have done it online to guarantee their payments will continue in September. Parents need to extend their claim by 31 August or payments will automatically stop.
Child Benefit is worth £26.05 per week – or £1,354.60 a year – for the eldest or only child and £17.25 per week – or £897 a year – for each additional child.
HMRC has written to 1.5 million eligible parents reminding them to extend their Child Benefit claim for their 16 to 19-year-old.
The quickest and easiest way to ensure payments continue is to extend via the HMRC app or online through the digital service.
Parents can also scan the QR code in their reminder letter which will take them straight to the digital service.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said:“Teenagers can be expensive and Child Benefit is an important source of income for your household. As soon as you know what your teen is doing in September, don’t miss out.
“You can extend your claim in minutes through the HMRC app or online to ensure your payments continue.”
Child Benefit can continue to be paid for young people who are studying full time in non-advanced education as well as unpaid approved training courses. Visit GOV.UK for a full list of approved courses.
If either the claimant or their partner has an individual income of between £60,000 and £80,000, the higher earner will be subject to the High Income Child Benefit Charge. For families who fall into this category, the online Child Benefit tax calculator provides an estimate of how much benefit they will receive, and what the charge may be.
As part of the government’s Plan for Change, many families will soon have the option to use a new digital service to pay the charge directly through their PAYE tax code instead of filing a Self Assessment tax return.
The new service will cut red tape for eligible employed parents who are liable to the charge. Those who choose to pay through their Self Assessment can continue to do so.
Families who have previously opted out of Child Benefit payments can opt back in and restart their payments quickly and easily online or via the HMRC app
This Playday (6 August), working families are encouraged to sign up for Tax-Free Childcare to save on their childcare bills.
Working families can save up to £2,000 annually when paying for childcare in 75,000 childcare settings across the UK.
Supporting the government’s mission to grow the economy and deliver on the Plan for Change by putting more money in the pockets of working people.
To mark Playday 2025 (6 August), HM Revenue and Customs (HMRC) is encouraging working families to save money by signing up to Tax-Free Childcare and using one of the thousands of facilities accepting it as payment.
Tax-Free Childcare means working families can save up to £2,000 annually for each child up to the age of 11, and £4,000 for a disabled child up to the age of 16, when they’re paying for their childcare.
There are now 75,000 childcare settings accepting Tax-Free Childcare as payment including nurseries, registered childminders, holiday activity clubs and, for when school starts back in September, before and after school clubs.
Playday is an annual celebration of children’s right to play, highlighting the importance of play in their health, wellbeing and development.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “Whether your child is interested in football, climbing, crafting or dance, there’s a huge variety of childcare settings accepting Tax-Free Childcare.
“Children can learn something new and have fun with their friends while their parents save on their childcare bills. Visit GOV.UK to sign up today.”
Families yet to sign up for Tax-Free Childcare can do it now to pay for their summer activities or start paying into it ready for breakfast and after-school clubs when the new term starts.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused payments can be withdrawn at any time.
For every £8 deposited in a Tax-Free Childcare account, the government tops it up by £2, which means parents can receive up to £500 (or £1,000 if their child is disabled) every 3 months towards their childcare costs.
Families could be eligible for Tax-Free Childcare if they:
have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until 1 September after their 16th birthday
the parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
each earn no more than £100,000 per annum
do not receive Universal Credit or childcare vouchers
New PAYE service announced to save around 35 million taxpayers’ time
New PAYE service to make tax system simpler and easier for around 35 million workers
At least 90% of customer interactions with HMRC to be digital by 2030
Reducing post and letters to save £50 million a year – equal to almost 1,500 full time nurses
Workers are set to take control of their tax affairs as the government announces a new online Pay As You Earn (PAYE) service for around 35 million UK taxpayers as HM Revenue and Customs (HMRC) sets out more than 50 measures to transform the UK’s tax and customs system.
The new online service for all PAYE taxpayers will make it simpler and easier to check and update their income, allowances, reliefs and expenses, and will be available via their Personal Tax Account or through the HMRC app.
This service forms part of HMRC’s Transformation Roadmap launched today that sets out ambitious plans to become a digital first organisation by 2030, with 90% of customer interactions taking place digitally.
The roadmap sets out more than 50 IT projects, services and measures that, once delivered, will transform the UK’s tax and customs systems, simplifying processes and making it easier to pay the tax that funds public services and deliver the government’s Plan for Change.
The plans to modernise the tax and customs system, introduce new AI technologies and work with third parties and intermediaries will make it easier for taxpayers, businesses and intermediaries to interact with HMRC.
The digital first approach will see HMRC automating tax wherever possible and offering new digital self-serve options across a number of tax regimes.
Alongside the new PAYE service, HMRC will save £50 million a year – the equivalent of almost 1,500 full time nurses – by moving customer letters and reminders to a digital first approach, reducing the reliance on paper correspondence, by the 2028 to 2029 tax year. Paper post provision will remain for critical correspondence and for the digitally excluded.
Increasing the use and investment in AI will enable customers to meet their tax obligations and allow HMRC to monitor the tax system in near real time. HMRC plans to introduce AI in work areas including:
HMRC advisers and caseworkers: using AI capability to automate call summaries and the use of internal GenAI Chat Assistants to support them in their work.
Digital assistants: developing new AI-powered features to help customers easily navigate HMRC services and improve the ability to update HMRC’s content and guidance on GOV.UK.
Compliance: delivering an automatic document identifier system for HMRC caseworkers to identify fraudulent documents during compliance activities by using a biometric likeness-liveness check.
HMRC will work with developers to create a set of principles which will set out HMRC’s expectations of how third parties use AI in software where it interacts with the department and the tax administration system. These principles will give developers the confidence to introduce AI functionality into their products in the UK and minimise the risk of those products introducing error or non-compliance.
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.”
Mr Murray’s key priorities for the department are to improve day-to-day performance and the customer experience, reform and modernise the tax and customs system and to close the tax gap. As announced at the Spending Review 2025, £1.7 billion will be provided to HMRC over 4 years to fund an additional 5,500 compliance and 2,400 debt management staff – to ensure more of the tax owed is paid, to fund public services.
HMRC is focusing on tackling wealthy offshore tax non-compliance, with an additional 400 people set to work on wealthy offshore tax risks. This includes experts in private sector wealth management, who will help find and tackle non-compliance more effectively and train HMRC compliance staff.
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 Transformation Roadmap sets out timescales for delivery and HMRC is committed to reporting on progress. Work is underway to deliver some of the measures set out in the roadmap this tax year, including:
extending the rollout of the SMS confirmation service to Self Assessment appeals, complaint cases and some PAYE services.
improving Self Assessment registration service and streamlining the exit process for those customers who no longer need to file a Self Assessment tax return.
expanding the rollout of the voice biometrics pilot to make customer verification easier when calling HMRC’s helplines.
a new service to give employed parents, who are newly liable for the High Income Child Benefit Charge, the choice to pay it directly through their tax code without needing to register for Self Assessment.
launching an enhanced reward scheme for informants, targeting information on serious non‑compliance in large corporates, wealthy individuals, offshore and avoidance schemes. The new scheme will reward informants with compensation linked to a percentage of any tax taken.
Further measures and projects to be delivered as part of the roadmap include:
digitalising the Inheritance Tax service to provide a modern, easy-to-use system, that makes submitting returns and paying tax simpler and quicker.
launching a new service to allow agents to digitally submit information which may impact their client’s tax code.
delivering a Digital Disclosure Service to allow customers and intermediaries to correct mistakes, pay liabilities and penalties for all taxes and duties.
introducing an electronic trade documentation pilot to see how it could improve customs operations.
progressing the Verifiable Credentials pilot with US Customs and Border Protection to test the use of new internationally interoperable digital credentials and identity standards.
HMRC wants to incentivise taxpayers to pay their tax on time by simplifying and strengthening penalties. In the 2023 to 2024 tax year, HMRC collected 94.7% of the total tax due. Those who meet their obligations and pay their tax on time should not be disadvantaged by the minority who don’t follow the rules. HMRC will update on modernising behavioural penalties later this year.
New legislation will come into effect from April 2026 to tackle tax avoidance and fraud by umbrella companies. Many umbrella companies operate within the law but the dishonest few can mean taxpayers are left with large and unexpected tax bills. The legislation will make recruitment agencies that use umbrella companies legally responsible for accounting for PAYE on workers’ pay.
Westminster’s Public Accounts Committee (PAC) warns of lack of clarity over how much tax is paid or avoided by the very wealthy, as new report highlights significant opportunities to collect more revenue.
HM Revenue & Customs (HMRC) cannot identify how much tax is paid by UK billionaires. In a report on collecting the right tax from wealthy individuals, the Public Accounts Committee (PAC) calls on HMRC to publish its plan for increasing tax yield from wealthy taxpayers both domestically and offshore.
Despite UK billionaires making up a relatively small number of people and the significant sums of money involved, the PAC was disappointed to find that HMRC cannot use the wide range of data it uses to identify wealthy people to provide transparency about the tax paid by the wealthiest.
A billionaire has wealth and assets 500x greater than a wealthy person who just meets HMRC’s definition* of ‘wealthy’, and so has huge potential on their own to affect how much revenue is available for public spending.
The PAC is seeking HMRC’s plan for improving its understanding of the wealth and assets held by billionaires, including how it might immediately start work on comparing available data on known billionaires, such as the Sunday Times Rich List, with its own records.
HMRC’s has done well to ensure wealthy taxpayers comply with tax rules brought in an additional £5.2 billion of tax revenue in 2023-24. This is a significant increase from £2.2 billion in 2019-20. However, the report notes that the scale of this success suggests either wealthy non-compliance has got worse, or that previous estimates of their tax avoidance were too low, and finds that HMRC needs to improve its assessment of the amount of tax that the wealthy avoid paying.
The tax authority told the inquiry that the tax gaps* for wealthy people and for offshore wealth are particularly difficult to measure. Given these difficulties, and the deficiencies in HMRC’s information on wealth, the PAC concerned that HMRC is overly confident and optimistic in its estimate that the wealthy tax gap is only £1.9bn.
Its partial estimate of the offshore tax gap, of £0.3bn, seems far too low, particularly when compared with UK residents holding £849bn in offshore accounts in 2019.
The PAC’s report finds that in 2023-24, there were only 25 criminal prosecutions of wealthy people and 456 penalties (down from 1,747 in 2022-23). This is despite the average time HMRC takes to close an investigation increasing every year between 2018-19 to 2022-23.
For investigations yielding more than £100,000, the average duration in 2023-24 was 40 months.
The PAC finds it particularly disappointing that HMRC has issued no penalties to enablers of tax evasion, despite acknowledging unscrupulous advisers often play a key role in helping the wealthy evade tax, and recommends HMRC assess whether it is using its powers to tackle non-compliance by the wealthy sufficiently, in particular, whether it makes sufficient use of available sanctions.
Lloyd Hatton MP, Member of the Public Accounts Committee, said: “This report is not concerned with political debate around the redistribution of wealth.
“Our Committee’s role is to help HMRC do its job properly ensuring wealthy people pay the correct tax. While HMRC does deserve some great credit for securing billions more in the tax take from the wealthiest in recent years, there is still a very long way to go before we can reach a true accounting of what is owed.
“We already know a great deal about billionaires living in the UK, with much information about their tax affairs and wealth in the public domain.
“So we were disappointed to find that HMRC, of all organisations, was unable to provide any insight into their tax affairs from its own data – particularly given that any single one of these individuals’ contributions could make a significant difference to the overall picture.
“We found a similar apparent lack of curiosity in how wide the tax gap is both for the very wealthy and for wealth stashed away offshore.
“Our report shows that, however you slice it, there is a lot of money being left on the table. HMRC must, under its new leadership, begin collecting the correct amount of tax from the very wealthiest – and this must include wealth that is currently squirrelled away in tax havens.
“There is certainly room for improvement. We hope that HMRC uses both our recommendations and the new funding it has secured in this area to do so.”
New rules will help unmask anyone evading tax due on their crypto profits
UK crypto holders must provide personal details to crypto service providers from January 2026 or face penalties of up to £300
Aligns with government’s Plan for Change to ensure everyone pays their fair share of tax to fund vital public services
Public coffers are set for a boost as HM Revenue and Customs (HMRC) goes after crypto owners that aren’t paying their fair share of tax.
From January 2026, people who own crypto – like Bitcoin, Ethereum or Dogecoin – must give personal details to every crypto service provider they use to make sure they are paying the right tax.
Those who don’t comply risk a £300 fine from HMRC.
Once data is received from service providers, HMRC will be able to identify those who haven’t been correctly paying tax on their crypto profits – bringing in money that will help pay for frontline nurses, police, and teachers.
This is estimated to raise up to £315 million by April 2030 in tax revenue – the same amount needed to fund more than 10,000 newly-qualified nurses for a year.
It’s part of a major drive by HMRC to tackle non-compliance including the small minority who are deliberately evading tax due on their profits from crypto.
Service providers will begin collecting data on users’ activities from January 2026. Any service provider that fails to report this information, or submits inaccurate or incomplete reports, could also be charged a penalty of up to £300 per user by HMRC.
The new rules mean crypto service providers must collect and report:
Your name, address, and date of birth
Your tax residence
Your National Insurance number or tax reference
A summary of your crypto transactions
James Murray MP, Exchequer Secretary to the Treasury, said:“We’re going further and faster to crack down on tax dodgers as we close the tax gap and deliver on our Plan for Change.
“By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police and other vital public services.”
Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design, said:“Importantly, this isn’t a new tax – if you make a profit when you sell, swap or transfer your crypto, tax may already be due.
“These new reporting requirements will give us the information to help people get their tax affairs right.
“I urge all cryptoasset users to check the details you will need to give your provider. Taking action now and having this information to hand will help you avoid penalties in the future.”
The new rules – known as the Cryptoasset Reporting Framework – will help HMRC identify those who need to pay tax on their crypto transactions.
They will also bring the UK into line with the international standard developed by the Organisation for Economic Co-operation and Development (OECD), enabling tax authorities to share information across participating countries.
Crypto users should already include any crypto gains or income in their Self Assessment tax returns. HMRC has introduced new dedicated sections to the capital gain pages to be completed from the 2024 to 2025 tax year.
Capital Gains Tax may be due when selling or exchanging crypto, while Income Tax and National Insurance could apply to crypto received from employment, mining, staking or lending activities.
Anyone unsure about their tax obligations can check if they need to pay tax when they receive or sell crypto on gov.uk.
Almost 826,000 UK families shared £632.2 million in government top-ups towards their childcare bills with Tax-Free Childcare in the 2024 to 2025 tax year
Working families urged to sign up now to give their summer plans a financial boost
Supporting the government’s mission to grow the economy and deliver on the Plan for Change
Nearly 826,000 working families saved up to £2,000 per child with Tax-Free Childcare in the 2024 to 2025 tax year. The money helps families pay for their childcare, as part of the government’s Plan for Change to put more money in people’s pockets.
HM Revenue and Customs (HMRC) is encouraging those yet to sign up for Tax-Free Childcare, to do it now and give their summer plans a financial boost.
Latest figures from HMRC show in March 2025, 36,095 families in Scotland used the scheme to save on their annual childcare bills, an increase of 4,925 families compared to the previous March.
Working families who sign up to Tax-Free Childcare can boost their annual budget by up to £2,000 per child up to the age of 11 or up to £4,000 up to the age of 16 for a disabled child.
Parents can use the scheme to help towards the cost of approved childcare whether that’s nursery for younger children, or for older children – wraparound or after school care clubs during term time or holiday clubs for the long summer holidays ahead.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Summer can be an expensive time if you have children. Whatever you’re planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today.”
For every £8 deposited in a Tax-Free Childcare account, the government tops it by £2, which means parents can receive up to £500 (or £1,000 if their child is disabled) every 3 months towards paying for their childcare costs.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused money in the account can be withdrawn at any time.
Families could be eligible for Tax-Free Childcare if they:
have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until 1 September after their 16th birthday
the parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
each earn no more than £100,000 per annum
do not receive Universal Credit or childcare vouchers
Parents of 16 to 19 year olds can go online to extend their Child Benefit claim to guarantee payments in September
Parents of 16 to 19 year olds reminded to extend their Child Benefit claim by 31 August to continue payments
Last year, 870,000 parents extended their Child Benefit with the majority confirming online
Parents extending via the HMRC app or the digital service guarantee their payments quickly and easily
Parents of 16 to 19 year olds will receive reminders from HM Revenue and Customs (HMRC) to extend their Child Benefit claim by 31 August if their child is staying in education or training or payments will automatically stop.
Child Benefit will automatically stop on 31 August on or after a child’s 16th birthday if it’s not extended.
Between May and July, letters will be sent to parents reminding them to go online to confirm if their teenager is staying in full time education or approved training after they finish their GCSEs to continue receiving their Child Benefit.
Parents can extend their claim quickly and easily via the HMRC app or online on GOV.UK. The letters also contain a handy QR code which takes parents straight to the digital service on GOV.UK.
Child Benefit is currently worth £26.05 per week – or £1,354.60 a year – for the eldest or only child and £17.25 per week – or £897 a year – for each additional child. More than 870,000 parents extended their Child Benefit claim for their teen last year with the majority confirming online or via the HMRC app in minutes.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Child Benefit is an important boost to families.As soon as you know what your teenager is planning to do, extend your claim in minutes to guarantee your payments continue in September.
“Simply go to GOV.UK or the HMRC app to confirm today.”
Child Benefit can continue to be paid for young people who are studying full time in non-advanced education as well as unpaid approved training courses. Visit GOV.UK to check full eligibility.
If either the claimant or their partner has an individual income of between £60,000 and £80,000, the higher earner will be subject to the High Income Child Benefit Charge. For families who fall into this category, the online Child Benefit tax calculator provides an estimate of how much benefit they will receive, and what the charge may be.
From this summer, as part of the government’s Plan for Change, families will have the option to use a new digital service to pay the charge directly through their PAYE tax code instead of filing a Self Assessment tax return.
The new service will cut red tape for eligible employed parents who are liable to the High Income Child Benefit Charge but those who choose to pay the charge through their Self Assessment can continue to do so.
Families who have previously opted out of Child Benefit payments can opt back in and restart their payments quickly and easily online or via the HMRC app.
Teenagers turning 16 can take control of their Child Trust Fund savings account, which could be worth thousands of pounds, and can withdraw the money once they turn 18. Child Trust Funds were set up for every child born between 1 September 2002 and 2 January 2011.
If teenagers or their parents and guardians know who their Child Trust Fund provider is, they can contact them directly.
If they don’t know where their account is, they can use the free online tool on GOV.UK to find out who their Child Trust Fund provider is.
Making Tax Digital for Income Tax goes live on 6 April 2026 – supporting the government’s Plan for Change to deliver economic growth
Eligible taxpayers encouraged to sign up to a testing programme now to get ahead of the changes
Digital record-keeping will deliver time-saving benefits for taxpayers
There is less than a year to go until sole traders and landlords with an income over £50,000 will be required to use Making Tax Digital (MTD) for Income Tax.
The launch on 6 April 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HM Revenue and Customs (HMRC).
By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of our Plan for Change.
Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.
James Murray MP, Exchequer Secretary to the Treasury, said:“MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.
“By modernising how people manage their tax, we’re helping businesses work more efficiently and productively while ensuring everyone pays their fair share.
“This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.”
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said:“MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.
“By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.”
From April 2026, individuals with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC. These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year.
Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. Those with qualifying income above £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then decrease to £20,000 from April 2028.
The phased introduction of MTD for Income Tax follows the successful implementation of MTD for VAT, which now helps more than two million businesses reduce errors and save time on their tax affairs. Businesses which joined the MTD for VAT testing phase were better prepared for the move to quarterly reporting.
An independent report published in 2021 found that 69% of mandated businesses experienced at least one benefit from MTD for VAT, while 67% reported that it reduced the potential for mistakes in their record keeping.
HM Revenue and Customs (HMRC) marks its 20th anniversary on 18 April 2025.
Two decades on, the department is harnessing the spirit of then Chancellor Gordon Brown’s bold reforms and embarking on a new era of transformation.
Supporting the government’s Plan for Change and mission for growth, HMRC is now firmly focused on closing the tax gap, modernising and reforming, and improving customer service.
HM Revenue and Customs (HMRC) marked its 20th anniversary yesterday on Friday 18 April 2025.
The department was established in April 2005 through the merger of the Inland Revenue and HM Customs and Excise, combining tax administrations to reduce overlap and enhance service delivery.
The creation of HMRC by the then Chancellor of the Exchequer, Gordon Brown, marked a significant reform in public administration, bringing together both direct and indirect tax collection under one organisation.
Two decades later, HMRC is at the heart of the government’s Plan for Change, dedicated to providing the best possible tax and customs service that drives economic growth, and makes working people better off.
HMRC enforces the National Minimum Wage and National Living Wage to make work pay, putting more money in people’s pockets. And in simplifying life for businesses through cutting red tape and improving digital services, it is helping them to grow the economy.
The new Child Benefit online claim service is also helping put money in new parents’ pockets, more quickly and easily, as well as boosting family finances through HMRC’s delivery of Tax-Free Childcare.
As the government works to deliver economic security and growth for working people, a more effective and digitally focused HMRC will be crucial to delivering a more productive and efficient state.
Key Milestones and Improvements
Over the past two decades, the decision to bring tax and customs together has enabled HMRC to undergo a transformative journey, marked by key milestones that have enhanced its operational efficiency.
Today, nearly every Self Assessment tax return is filed online. The top-rated HMRC app has been downloaded more than 7 million times, and our digital services continue to grow – making it easier for everyone to get their tax right and more difficult for evaders to cheat the system.
The introduction of Making Tax Digital (MTD) for VAT in 2019 has evolved customer interactions with the wider tax system, leading to a substantial increase in online VAT returns. And today, MTD for Income Tax Self Assessment is on the verge of being launched, in a move that will both make life easier for small businesses (sole traders) and tackle non-compliance to help close the tax gap.
HMRC has also reduced the number of its offices from more than 500 two decades ago to just 28 today, as it further reduces its office space in central London. The government is building on this journey of efficiency, as well as reinforcing HMRC’s status as a truly national organisation.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:“For 20 years and for centuries before, HMRC and its predecessor organisations have been an integral part of the UK’s fabric.
“With the support of our dedicated tax professionals right across the UK, our impact is far reaching. From tackling complex challenges and catching wrongdoers to implementing a nation-defining program like furlough, our work is pivotal.
“Day in and day out, whether seen or unseen, in the UK and with international co-operation, we collect the money that funds vital public services and provides financial support to those who need it most.”
As HMRC embarks on the next 20 years, the commitment to sustainability and operational efficiency remains a priority. By adopting new technologies, HMRC is focusing on improving customer service and delivery through further system improvements and faster, more user-friendly digital platforms.
HMRC’s journey continues to evolve, benefiting taxpayers, families and the overall efficiency of revenue collection. As HMRC looks to the future, it remains dedicated to providing the best possible tax and customs service, to fully support the UK economy in helping rebuild Britain in a decade of national renewal.
