Always With Skilled Caseworkers Making Final Decisions: HMRC's Transformation Roadmap Update, July 2026

HMRC, the UK's tax and customs authority, published its Transformation Roadmap in July 2025. In July 2026 it published an update on its progress, a corporate report the page dates "Updated 27 July 2026." Parts of it follow, not the whole.

Data and AI in Compliance Work

"Modernising how HMRC collects, processes and uses data is central to HMRC's approach." Since April 2025, the update says, HMRC has worked to strengthen the data foundations it needs "to promote compliance and target interventions more effectively." It is legislating a new obligation on third-party data holders, which is meant to improve the data reported to it on financial account information and card sales from the 2027 to 2028 tax year.

It also turned to the private sector. "HMRC held its first competition with the private sector in 2025 to bring in and test AI, data science and other innovative approaches to tackling deliberate evasion and improving compliance." "Following the first 2 stages of the competition, 2 businesses have been awarded 12-month contracts to pilot their solutions ahead of the final tender stage."

Inside the department, HMRC says it will keep rolling out an AI tool to help colleagues draft and summarize documents, emails and meetings, and to support compliance activity, "always with skilled caseworkers making final decisions." Among the new systems for its compliance work, it lists tools to help caseworkers "identify fraudulent documents during compliance activities using more advanced recognition mechanisms," and access to "generative AI systems that provide rapid, clear and consistent guidance."

HMRC's own line for its caseworkers is that the tool supports and a person decides. In a compliance case, what record would show which decision was the person's?

AI in the Department and in Tax Software

The update says HMRC "is committed to adopting AI responsibly, applying its established ethical and safety controls, aligning with government AI, technology and accessibility frameworks and HMRC's Charter standards." Its examples for 2025 to 2026 include testing environments that use AI-generated synthetic data, so that new AI tools can be tried "without risking customer data," and a pilot of AI that drafts notes from customer calls "while keeping a human in the loop for review."

Since April 2025, HMRC says, it has set out "HMRC's expectations for responsible use of generative AI in tax software in published guidelines to give developers the confidence to introduce AI functionality into their products in the UK, while minimising the risk of those products introducing error or non-compliance." The guidelines themselves are a separate document, not reported here.

Digital Records and the E-Invoicing Plan

Making Tax Digital, the update explains, "requires taxpayers to keep digital records and send tax information to HMRC more regularly using compatible software." It reached income tax in April 2026, starting with sole traders and landlords above an income threshold, and is to widen in April 2027 and April 2028. Over time, the update says, this "will also support improvements to the third-party data HMRC receives."

"The government will also mandate e-invoicing for all VAT invoices from April 2029." HMRC and the Department for Business and Trade held workshops with industry on the design of the UK e-invoicing regime, the update says. HMRC "is working with DBT to publish an e-invoicing roadmap at Budget 2026 that will set out the milestones to implementation in April 2029 and build on co-creation work taking place with industry representatives in 2026."