HMRC collects £938.8bn, and its approach to tax is changing
Tax receipts rise as HMRC invests further in compliance, data and automation
HMRC collected £938.8 billion in tax and National Insurance receipts during 2025/26, an increase of 9.3% on the previous year.
It’s a sizeable figure, but HMRC’s latest annual report tells us more than simply how much tax was collected. It also gives an indication of where the department is heading, particularly when it comes to compliance, digital services and the increasing use of data and automation.
For individuals and businesses, those developments are worth paying attention to.
Where is the money coming from?
Income Tax, Capital Gains Tax and National Insurance remained the biggest sources of Government tax revenue.
Together, they accounted for 59% of HMRC’s total receipts during the year, underlining just how important employment and personal taxation remain to the public finances.
Alongside collecting tax, HMRC continued to administer tax reliefs, repayments and financial support for individuals and businesses. It also remained responsible for customs processes and supporting international trade.
Greater focus on compliance
Reducing the tax gap – the difference between the amount of tax theoretically owed and the amount actually collected – remains one of HMRC’s main priorities.
During the year, HMRC continued using compliance investigations, debt collection and targeted enforcement to identify and recover unpaid tax.
Technology is playing an increasingly important role here too.
HMRC continued investing in data, automation and technology to help identify unpaid tax and make its compliance work more efficient.
For taxpayers and businesses, good record-keeping has always mattered. As HMRC becomes increasingly capable of analysing and comparing the information available to it, keeping accurate and consistent records becomes even more important.
HMRC continues to move online
Modernisation was another major theme during 2025/26.
HMRC progressed its preparations for Making Tax Digital for Income Tax, while continuing to develop digital services for taxpayers, businesses and agents.
The department also wants more routine enquiries to be dealt with online, reducing reliance on telephone support.
Customer service performance remained under pressure during the year, although HMRC reported further improvements across its digital channels.
Automation and artificial intelligence are also now being used within some of HMRC’s operational and compliance processes.
What does this mean for taxpayers?
HMRC identified three main priorities during the year: reducing the tax gap, improving customer experience and modernising the tax and customs system.
Those objectives shaped both its spending plans and its operational work.
For businesses in particular, the direction of travel is fairly clear. Tax administration is becoming increasingly digital and data-led, while HMRC continues to invest in its ability to identify discrepancies and unpaid tax.
That doesn't mean businesses need to be worried about HMRC. It does mean there is increasingly little room for poor records, missed deadlines or figures that don't properly reconcile.
Final thoughts
HMRC's £938.8bn of receipts may be the headline figure, but the wider story in its annual report is how tax administration itself continues to change.
Better use of data, greater automation, Making Tax Digital and increased compliance activity are all becoming part of the normal tax environment.
For business owners, having good systems and keeping on top of your tax position throughout the year is becoming more important, not less.
If you're not confident that your records, tax planning or accounting systems are keeping pace, that's something I can help with.
