HM Treasury published the Spending Review on 18 June 2025, highlighting key public spending priorities across health, defence, and—crucially—tax compliance. While not a full multi-year fiscal plan, this review signals HMRC’s growing focus on efficiency and digital transformation. UK businesses must understand how these shifts affect compliance costs and the broader operating environment.
Key Announcements Affecting Business
- £7.5 bn for Tax Recovery: HMRC to be funded for 5,500 additional compliance staff and 2,400 debt managers to close the tax gap.
- Digitalisation Push: Investment of £500 million to ensure 90% of HMRC interactions are digital/self-serve by 2029–30 (up from 70% today). AI support features to guide businesses will be introduced.
- Consultancy Cuts: £700 million per year in consultancy savings aiming for leaner government.
Read more about the gov.uk announcement
Impact on Businesses
- More Enforcement Activity: Expect heavier scrutiny and faster escalation of potential errors.
- Rise of Digital Compliance: The HMRC portal is becoming the default — less room for alternative filing approaches.
- Long-Term Savings for Business: In the longer run, better HMRC tools may reduce time spent managing queries.
- Short-Term Investment Needed: Firms still using outdated accounting methods should invest in upgrades now.
Business Strategy Takeaways
- Use the digital window: Monitor HMRC system improvements and adopt early where helpful.
- Prepare for checks: Make sure HMRC registries — PAYE, VAT, CT — are accurate and up to date.
- Boost staff awareness: Regularly train finance teams on evolving HMRC expectations.
- Factor costs into budgets: This isn’t just about tax — compliance may require internal investment in systems.
Conclusion
The June Spending Review sets UK tax compliance on a new trajectory. Businesses that modernise systems and tighten compliance now will benefit from smoother interactions and lower risk under HMRC’s digital era.