The recent Autumn Budget offers an insight into HMRC’s future areas of focus, through its announcements and future funding commitments. It is clear that HMRC will continue its efforts to address the tax gap, especially in relation to tax evasion, criminal activity, and the hidden economy. For businesses and individuals, this will likely translate directly into a higher risk of HMRC scrutiny and investigation. 

New tools and incentives to detect fraud

The government is not only providing HMRC with additional funding to establish a dedicated small business evasion and enforcement team, but also investing in powerful new tools and incentives to gather information and target high-value non-compliance. 

US-style rewards for informants 

The Budget confirmed a previously discussed reward scheme for informants, modelled on the successful US system. For cases where tax recovered exceeds £1.5 million, HMRC will pay rewards of up to 30% of the additional tax collected. These changes apply with immediate effect. This scheme is designed to incentivise 'whistleblowers' to report serious fraud and evasion by large corporates and wealthy individuals, to help HMRC identify the most valuable cases. 

Data and digital enhancement 

HMRC continues to invest in its capacity to detect evasion through technology.  

From April 2028, HMRC will acquire third-party data more frequently on interest income and card sales, increasing its ability to spot discrepancies and undeclared income. 

The government will publish a call for evidence in early 2026 to develop point-of-sale software standards, improving HMRC’s ability to detect, prevent, and enforce against businesses using illegitimate software to hide sales and evade tax. 

As previously announced, from 1 January 2026 UK Cryptoasset Service Providers will be required to report on their UK tax-resident customers, increasing transparency in the digital asset space. 

"HMRC’s digital capabilities are transforming enforcement. Technology is enabling a faster and more proactive approach to tackling tax avoidance and evasion”

Justin Stevenson 

Tackling rogue directors 

The government is investing £25 million to recruit 50 additional Insolvency Service staff for a new Abusive Phoenixism Taskforce. The Company Directors Disqualification Act 1986 will also be amended to extend the circumstances under which directors who abuse insolvency to evade tax can be disqualified. 

Boosting HMRC debt management 

Recognising the rising tax debt, the government is investing £153 million in HMRC’s debt management capacity, funding additional staff and expanding partnerships with private sector debt collection agencies to deliver year-on-year reductions in the tax debt balance. 

Construction Industry Scheme (CIS) 

The construction industry has long been an area of focus from HMRC due to the high risk of non-compliance. HMRC powers will be strengthened to tackle fraud within the CIS, with new regulations aiming to simplify administration set to take effect from 6 April 2026.

Increased penalties 

Corporation Tax late filing penalties will be doubled from 1 April 2026 while increased penalties for late payment of ITSA and VAT will apply from 1 April 2027. The framework for publishing the details of deliberate tax defaulters will be strengthened and a consultation is due in early 2026 on introducing a new 'recklessness' criminal offence for direct tax, aligning with existing indirect tax offences. 

Loan charge Review   

In a positive move, a new settlement opportunity will be introduced to support those subject to the loan charge to resolve their affairs with HMRC. This will be legislated for in Finance Bill 2025-26 and will result in significant reductions in the amounts due especially for lower earners.  

Tax advisers to register with HMRC 

From May 2026 tax advisers will be required to register with HMRC to help identify those who are unable to meet HMRC’s standards. Combined with the sanctions taking effect from April 2026 to tackle tax advisers who facilitate non-compliance, and the ongoing crackdown on promoters of tax avoidance, this reflects a continued shift in focus targeting rogue tax agents, not just taxpayers.

What this means for you 

The 2025 Budget indicates a shift towards more proactive action by HMRC, with increased focus on tax evasion - both on the High Street and online - alongside tougher debt collection.  

Businesses and individuals must ensure their tax compliance is accurate and thoroughly documented. The focus on tax advisers will also make it more important than ever to ensure that tax advice is taken from a reputable source.  

“The loan charge review offers some overdue relief, but the broader measures make HMRC’s direction unmistakable: tougher action, broader powers, and sharper scrutiny. This is the moment to revisit and regularise any historic tax non-compliance.”

Barbara Bento