HMRC’s transformation roadmap: what it means for tax disputes

On 21 July 2025, the government released HMRC’s long-awaited “transformation roadmap”, setting out its digital-first vision for the future of UK tax administration. The document outlines sweeping changes across HMRC’s processes - promising efficiency, greater use of automation and AI, and a modernised compliance regime. But beneath the headlines of simplification and service improvement lies a more complex picture, particularly for those involved in contentious tax work. The roadmap signals a shift in how HMRC identifies, engages with, and resolves non-compliance, with important implications for taxpayers and their professional advisers.

A digital-first HMRC: opportunities and risks for taxpayers

By 2029/30, HMRC wants 90% of interactions to be fully digital. Its online accounts, mobile app and AI-driven assistants will become the default gateway for most taxpayers. Tools for PAYE taxpayers, NIC refunds, and self-assessment registration are among the near-term changes.

For many, this shift may feel like progress. But it also means, the potential for:

• increased risk of automated error or action, especially in complex compliance scenarios
• a reduction in face-to-face engagement, which historically helped resolve nuance in grey areas
• more system-driven assumptions and notices, which may be harder to challenge early without proactive intervention.

Disclosure and correction: a new landscape?

HMRC’s proposed digital disclosure service (expected before 2029) is designed to allow taxpayers to correct errors and pay liabilities voluntarily - without triggering formal enquiries. At the same time, it is:

• likely to standardise the disclosure process, with limited room for tailoring or negotiation
• set to integrate with AI and third-party data sources, increasing the chances of detection before voluntary disclosure
• expected to automate penalty calculations, raising questions about proportionality and exercise of discretion to ensure a fair outcome.

The voluntary disclosure space may soon become less flexible - requiring advisers to act more swiftly and with greater precision when engaging with HMRC.

Legal interpretation: new approaches to guidance and legislation

 HMRC's roadmap hints at a firmer stance on disputes relating to the correct interpretation of the law, with HMRC pledging “clearer expectations” in guidance and signalling a willingness to pursue legislative changes in contentious areas.

This shift raises the following potential risks:

• administrative guidance may be used more aggressively, potentially cutting across judicial decisions or settled practice
• advisers may need to engage earlier in the dispute resolution process, to avoid retrospective enforcement
• disputes over interpretation may escalate more quickly, particularly where HMRC officers feels emboldened by policy support.

What it means for tax advisers

Tax advisers, particularly those involved in contentious or high-risk tax matters, will need to adapt quickly to the evolving digital enforcement environment.

Some key themes

• Digital engagement will be unavoidable: the adviser interface is due for overhaul in 2026/27. Logging in, accessing client data, and submitting documents will all happen through redesigned digital portals.
• Faster timelines and less discretion: with more automated systems and set workflows, there may be less room to negotiate deadlines, extend response times, or explore informal resolution with HMRC before formal challenge.
• Increased compliance support burden: as more clients interact digitally (or fail to), advisers will become the de facto translators of HMRC’s evolving systems - especially for digitally excluded taxpayers or those taxpayers whose affairs are complex.
• New areas of risk management: advisers will need to monitor how AI and third-party data use impact risk profiling, disclosure, and information gathering, particularly in relation to taxpayers whose affairs are complex or involve an offshore element.

In short, the tax adviser role will become more digital, more proactive, and potentially more defensive, as HMRC’s compliance model develops and accelerates.

Tax Tribunal and disputes process modernisation

HMRC’s ambition to integrate its case management systems with the First-tier Tribunal raises questions about the structure and flow of disputes. If delivered well, it could reduce delays and increase consistency, but:

• the proximity of HMRC systems to Tribunal processes may blur separation of functionality lines, especially if data flows are poorly managed;
• there may be new challenges around procedural fairness, particularly where automated decisions form the basis of appeals;
• the Tribunal may need to adapt to more digitally produced evidence - from AI risk assessments to machine-led disclosures.

Closing the tax gap: a more assertive HMRC?

Alongside the roadmap sits a renewed emphasis on enforcement. HMRC is:

• investing heavily in offshore avoidance and evasion detection
• increasing its use of real-time third-party data
• preparing to publish a tax debt strategy by 2026
• committing to standardised identity verification before 2031.

Combined, these measures suggest a more assertive (and some might say, aggressive) HMRC, equipped with more effective tools and enhanced detection of non-compliance - with less reliance on traditional enquiry pathways.

A new era for tax disputes and adviser strategy?

HMRC’s transformation roadmap is not just about technology - it is about shifting how tax compliance, correction, and enforcement are approached. For tax disputes lawyers and advisers, the key is to anticipate and manage the procedural, interpretative, and strategic consequences of a more automated, less negotiable system.

Taxpayers will increasingly look to their advisers, not just for technical tax advice, but also for guidance on navigating a rapidly digitalising enforcement authority, ensuring their rights are protected, and pushing back where automation meets ambiguity.

The Transformation Roadmap can be viewed here.