HMRC is going digital: what a real-time tax system means for your business
Quarterly updates, payrolled benefits, e-invoices, Direct Debits and more third-party data. Each change is small; together they move tax closer to real time.
HMRC’s Transformation Roadmap, published in July 2025, set out a plan for a digital-first tax authority, with at least 90% of customer interactions digital by 2029-30. Budget 2026 adds more pieces. Seen together, they describe a tax system that knows more, sooner.
The pieces
- 2026Making Tax Digital for Income Tax begins; platforms already report sellers’ income
- 2027Benefits in kind taxed through payroll; MTD reaches £30,000; error correction duty legislated
- 2028MTD reaches £20,000; most benefits payrolled; duty to correct errors in returns from 1 April
- 2029E-invoicing for VAT; Direct Debits for VAT and PAYE; more regular Self Assessment payments
More data, from more places
The Budget also includes a consultation on modernising how HMRC collects property income data from third parties, an exploration of HMRC data in Open Finance, a call for evidence on integrating business systems, and 670 more compliance officers. The direction is clear: HMRC will increasingly compare what you tell it with what others report.
What it asks of businesses
- Keep records digitally, as transactions happen, not at the year end.
- Make sure what you report matches what platforms, banks and customers report.
- Correct mistakes promptly: from April 2028, it becomes a legal requirement.
- Plan cash for more frequent payments, collected by Direct Debit.
More on
This insight is general information, not advice for your circumstances. Talk to us before acting on it.