- The government is working on modernising tax administration, across a range of workstreams, several of which are described below.
- Following the 2024 call for evidence The Tax Administration Framework Review – enquiry and assessment powers, penalties, safeguards, the government ran two separate consultations in 2025 – on improving dispute resolution and on reforming behavioural penalties.
- Improving HMRC’s approach to dispute resolution sought views on options for simplifying, modernising and reforming HMRC’s approach to dispute resolution. It focused on the ease of access and use of HMRC’s alternative dispute resolution and statutory review processes, and opportunities for improvement at various points in the taxpayer journey. The consultation closed in July 2025. Following consultation, HMRC have worked closely with a broad range of policy teams to test and refine its reform proposals and intends to hold workshops later in 2026 to explore options relating to payment requirements and the aligned appeals process.
- Behavioural penalties reform sought views on options to simplify and strengthen behavioural penalties which are currently in place. Following this consultation, the government intends to reform, rather than replace, HMRC’s inaccuracy and failure-to-notify penalty regimes, with a focus on simplifying the rules, encouraging early voluntary disclosures, reviewing offshore penalties, and introducing tougher sanctions for deliberate and repeated non-compliance. HMRC are also considering whether the reforms should be extended to other behavioural penalties.
- In July 2026, the government published draft legislation on Modernising the Correction of Errors, which introduces an explicit obligation on taxpayers to take reasonable action to correct errors once they are identified and gives HMRC a new power to issue a Customer Correction Notice.
- Draft legislation has also been published on reforms to improve HMRC’s ability to carry out compliance checks by meeting OECD Global Forum standards on information exchange related to deceased taxpayers and cryptoasset-related businesses.
- Timing: the technical consultation on modernising the above-mentioned draft legislation is open until 7 September 2026. On behavioural penalties reform, publication of draft legislation in this area has been deferred pending further policy development.
Resources (click to open)
- Modernising the correction of errors (HMRC, July 2026)
- Reforming information powers and modernising computer records law (HMRC, July 2026)
- Reform of behavioural penalties – summary of responses (HMRC, July 2026)
- The Tax Administration Framework Review – Improving HMRC’s approach to dispute resolution (HMRC, April 2025)
- The Tax Administration Framework Review – enquiry and assessment powers, penalties, safeguards (HMRC, October 2024)
