In relation to customer interactions, the Government will invest a further £500 million with the aim of making HMRC a ‘truly digital-first organisation’. The Spending Review anticipates that by 2029/30, a minimum of 90 percent of customer interactions will be digital self-serve, up from around 70 percent in 2025. The investment is to improve digital services so people can get the information they need without having to call or write to HMRC and will enable the use of artificial intelligence (AI) to help taxpayers with their enquiries and to raise productivity within HMRC. The Government will continue to ensure alternative channels, including phonelines, are still there for those who need them.
The intention is also that HMRC will eliminate all outbound post, with limited exceptions such as letters which generate revenue for the Exchequer, reducing the number of letters HMRC send by 75 percent and saving £50 million a year by 2028/29.
The spending review document also highlights that the Valuation Office Agency will merge into HMRC by the end of 2025/26.
It is interesting to note that there has been a steady increase in staff investment under this Government. At the time of the election the Government announced it would invest in 5,000 additional compliance staff and at Autumn Budget 2024 a further 1,800 debt management staff were promised. Further additions were made at the Spring Statement where the Chancellor needed to rely on further reductions in the tax gap.
The Spending Review states that the additional funding, together with the Exchequer Secretary to the Treasury becoming Chair of HMRC’s Board, reflects a commitment to closing the tax gap and modernising HMRC. These are to be welcomed even though it has to be acknowledged that reducing the tax gap is difficult to do in practice.
