HMRC has promised a more efficient and easy-to-use tax and customs system, relying heavily on AI and digital technology.
The ‘Transformation Roadmap’, published yesterday (21 July), sets out how the government intends to modernise its online tax and customs administration, making it easier to use while also “closing the tax gap”.
The paper includes plans for improving tools and services used by businesses moving goods across the UK border, such as the Online Trade Tariff and temporary admissions.
‘Modernised tax system’
James Murray, secretary to the treasury, said that the aim was to have a “modern tax system that raises the revenue we need to support the public finances, whilst reducing the time that people spend managing their tax affairs, and freeing businesses’ time to focus on growth.”
“A transformed tax administration system will be more automated, more focused on self-service, and better set up to get things right first time.”
Murray, a former deputy London mayor, said that the move would require a “cultural change at HMRC”.
Trade changes
The report recognised the crucial role that UK customs authorities and systems play in enabling businesses to trade internationally.
Research from the British Chambers of Commerce, published last year, found that customs procedures were the main barrier to exporting for 45% of businesses.
According to figures from HMRC’s new roadmap, the Customs Declaration Service (CDS) facilitated the movements of goods worth over £1trn in 2024-2025; 78 million declarations were submitted on the border IT system for these goods.
Among the changes promised include a new AI service for the Online Trade Tariff, which would provide “bespoke support to importers and exporters, helping them to easily understand their obligations from tax year 2027 to 2028 onwards.”
Changes to the Temporary Admission procedure were also mentioned. These would extend and simplify the time limits for some goods and remove some restrictions on who can use the procedure and what they can do with their goods.
Changes to Temporary Admission were reported to members of the Chartered Institute earlier this month in a regular ‘Customs Corner’ feature produced by the body’s customs practice director, Anna Doherty.
Other measures
Other measures highlighted in the roadmap include training staff to use new technology, pilot schemes for digital trade documentation and looking at ways to boost technology such as e-invoicing.
The government also said that HMRC would be expanding its ability to fight fraud and sanctions-evasion, with crackdowns on phoenix companies being used to avoid paying debts.
Even today, London Centric reported on how gift shops in central London, only a few hundred meters away from HMRC’s headquarters in Whitehall, appeared to be engaging in the practice of ‘phoenixing’.
AI future
The government’s plan to use AI to boost civil service productivity was given a further boost by the announcement, also yesterday, that Westminster and OpenAI had signed an memorandum of understanding (MoU) to establish “strategic partnerships” that open up AI use across government.
Technology minister, Peter Kyle said that AI would be “fundamental in driving the change we need to see across the country.”
However, a National Audit Office report from last year found that data quality issues, lack of guidance on implementing AI, and difficulties in attracting and retaining skilled staff remained barriers to the government’s plans.
