HM Revenue & Customs (HMRC) recently published their updated Transformation Roadmap, which brings a number of confirmations and updates regarding Making Tax Digital (MTD) and wider tax administration in the UK.

The Transformation Roadmap is part of HMRC’s ambition to become a digital-first organisation by 2030, where at least 90 per cent of interactions with the tax authority will occur digitally.

Here are the key highlights from the Transformation Roadmap.

MTD for Corporation Tax abolished

The Transformation Roadmap confirms that MTD for Corporation Tax (CT) will no longer be going ahead.

This move is not surprising, especially given the well-documented delays and difficulties ahead of the rollout of MTD for Income Tax (IT).

Instead, HMRC intends to renew internal CT systems as part of an overall move towards modernising UK tax administration.

Most businesses already use digital systems where appropriate, so the abolishment of MTD for CT doesn’t mean a move away from digital record keeping.

However, it does offer a reprieve for businesses already dealing with an increasingly complex and costly compliance, giving them the flexibility to choose systems that suit their business needs.

New online PAYE service

A new online Pay As You Earn (PAYE) service is being introduced for around 35 million UK taxpayers.

Accessed through the Personal Tax Account and HMRC app, the new service aims to make it easier to check and update incomes, allowances, reliefs, and expenses.

Taxpayers will be able to better understand the information held by HMRC and make changes to ensure they are paying the right tax on their salary or pension.

A new expenses service will also enable PAYE taxpayers to submit claims for tax relief on their allowable expenses and upload supporting evidence all in one place.

Digitalisation of Inheritance Tax

The process of migrating the current Inheritance Tax (IHT) system to a new digital system will begin this tax year, with the intention of operating a fully digitalised IHT service from the 2027/28 tax year onwards.

The aim is to make submitting returns and paying IHT simpler and quicker

Data and AI

With a total tax gap of £46.8 billion in the 2023/24 tax year, HMRC has laid out new measures to tackle fraud and non-compliance.

HMRC is set to increase its use of third-party data to help promote compliance, such as by pre-populating tax returns.

The Transformation Roadmap also lays out detailed plans for HMRC’s use of Artificial Intelligence (AI) to improve tax collection and compliance.

For example, AI analytical tools will be used to improve the delivery of targeted digital nudges to taxpayers, designed to help them submit Income Tax Self Assessment and Corporation Tax returns on time and reduce the risk of errors.

HMRC also aims to use AI to assess risks and identify patterns of non-compliance that humans might miss.

Additionally, HMRC caseworkers will be trained in how to use enhanced AI-powered systems (including Generative AI) to speed up casework.

HMRC’s AI ethics working group will be responsible for monitoring the use of AI and establishing mandatory processes within the tax authority to ensure that AI is being used responsibly.

Valuation Office Agency x HMRC

The Valuation Office Agency (VOA), which gives the Government the valuations and property advice needed to support taxation and benefits, will be completely incorporated into HMRC from April 2026.

The move is designed to reduce administrative costs by at least five per cent, as well as simplify the tax system by bringing the VOA’s property tax services under the scope of HMRC.

This means queries and concerns regarding your business properties and related taxes will be dealt with directly through HMRC.

Face the future of tax with Rotherham Taylor

Although several measures in the Transformation Roadmap may seem far off, they will come round sooner than you realise.

Seeking advice from your accountant now is essential to make sure you are prepared for dealing with HMRC’s new services and requirements for business and individual taxation.

Rotherham Taylor’s experienced tax specialists are here to help you with your current and future tax affairs, ensuring you make the most of reliefs and allowances to support your overall tax planning strategy.

If you have questions about anything covered in HMRC’s Transformation Roadmap, please contact our friendly tax advisers today.