Budget 2026: The announcements that matter
Key changes and what they mean for you
HMRC: More Resources – More Powers
Unsurprisingly, Budget 2026 continues the now familiar trend of giving HMRC greater resources and wider powers to increase tax receipts and narrow the tax gap. The government’s reliance on compliance and enforcement to raise revenue places renewed emphasis on the scope of those powers, the safeguards governing their use and HMRC’s ability to deploy its additional resources effectively. While the precise details of some proposals have yet to emerge, the following measures and proposals are worth noting.
Tackling avoidance: The government will shortly publish a consultation on a package of measures to tackle the promotion and use of tax avoidance.
Information and inspection powers: HMRC’s civil information and inspection powers will be modernised by updating the rules for issuing information notices and revising the definition of computer records to reflect modern ways of storing and accessing information. The measure will be introduced through legislation in Finance Bill 2026/27.
Correction of errors in tax returns: The government will introduce new requirements for taxpayers to correct tax returns and documents where inaccuracies are identified. These will be introduced through legislation in Finance Bill 2026/27 and take effect from 1 April 2028.
Debt management: The government will invest £70 million over the next five years to increase HMRC debt management capacity and increase the collection of overdue tax debt through expanding HMRC’s use of third-party debt collection agencies.
Low value tax debts: The government has published a summary of the consultation that ran earlier this year on proposals for tackling low value tax debts. The consultation proposed a new policy, applicable to customers who have persistently failed to engage with HMRC, to use automated processes to recover established lower-value tax debts through regular deductions direct from bank accounts. Following consultation, the government has decided to proceed with the development of the policy, with draft legislation to be published in Summer 2027.
Tax compliance: The government will invest £485 million over the next five years to recruit an additional 670 compliance staff by 2029/30 to tackle non-compliance and bring in additional tax revenue. This measure is an expansion of the 5,500 additional compliance staff previously announced at Autumn Budget 2024 and Spring Statement 2025 and increases the total planned expansion of HMRC’s compliance workforce to 6,170 by 2029/30.
Naming and shaming: The government will strengthen the framework for how HMRC publishes the details of deliberate tax defaulters. Changes will be brought forward in 2027.
Property Income Data Reporting: The government has decided to modernise how property income data is collected and reported to HMRC through the new data gathering provisions enacted in Finance Act 2026. A consultation will run until 20 January 2027 and seeks views on the design and implementation of the proposed reforms. Those reforms will introduce standing reporting obligations for property income data. They will apply to information provided by letting agents and tenancy deposit protection schemes, and are part of the government’s wider programme to modernise how HMRC receives and uses third-party data to support taxpayers to get their tax right the first time.
Modernising Corporation Tax administration: the government is gathering views on the future of Corporation Tax administration and exploring how it could evolve to better support companies, agents and government. A call for evidence will run until 20 January 2027 and seeks views on how the long-term future of Corporation Tax administration could make it easier for businesses to understand and meet their obligations, make administration easier and give greater clarity and confidence.
Excise penalties: a new targeted civil penalty for deliberate conduct intended to evade UK excise duty before an excise duty point arises will be introduced in Finance Act 2026/27.