As the government prepares for the anticipated compliance activity from HMRC in 2025, taxpayers must stay vigilant and aware of how these initiatives could affect their obligations ...
One of HMRC's key anticipated strategies includes the expansion of 'one to many' campaigns!
Following the revelation of a staggering tax gap estimated at £39.8 billion, HMRC will strategically enhance its compliance workforce and bolster its methods to encourage taxpayers to accurately report their income and liabilities.
"HMRC is investing in a lot of new personnel!"
In late 2024, it was reported that HMRC would invest a substantial £1.6 billion over the next five years to recruit an additional 5,000 compliance officers and 1,800 debt management officers. This represents a significant 10% increase in the existing headcount, with the initial 200 compliance officers brought on board in November 2024 already making their impact felt. This change underscores the growing emphasis on compliance among HMRC's objectives, which aims to address the tax gap more effectively.
One of the key anticipated strategies includes the expansion of 'one to many' campaigns. These campaigns are designed not as formal compliance checks, but as proactive outreach to educate taxpayers about common pitfalls and encourage them to review their tax affairs.
The onus will be firmly placed on taxpayers to identify and disclose any underreported tax liabilities, making these initiatives a cost-effective revenue-raising mechanism for HMRC. In 2025, HMRC plans to issue similar campaigns across various sectors, as has already been witnessed with recent communications targeting charities regarding VAT on non-business income.
"Another critical area of focus lies in the research and development (R&D) tax relief scheme!"
Commencing in April 2024, a new, streamlined merged scheme aims to simplify the claims process while simultaneously reducing errors and instances of abuse. By refining the claims process, HMRC hopes to carry out more effective compliance checks and ensure the timely processing of legitimate R&D claims. Taxpayers engaging in innovation and growth must remain aware of these changes in order to maximise the benefits while staying compliant.
HMRC is also increasingly utilising data analytics to identify patterns and anomalies in tax returns. Enhanced data integration allows for a clearer picture of compliance behaviour, empowering HMRC to pinpoint areas for further investigation or education.
Taxpayers with previously unreported incomes or inconsistencies in their filings may face scrutiny as these techniques evolve, making it prudent for them to review their tax affairs proactively!
The anticipated compliance activities by HMRC in 2025 herald a significant shift in how tax affairs will be managed. With increased resources, innovative campaigns, and sophisticated data techniques, taxpayers are encouraged to stay informed and prepare for active engagement.
The spotlight on individual and corporate compliance means that navigating tax affairs will require diligence and foresight.
Remain proactive and informed to avoid any HMRC scrutiny.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about HMRC's strategy in 2025 and how it may affect you and your business, it could be a great idea to call me on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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