HM Revenue & Customs has announced a new online Pay As You Earn (PAYE) service for UK employees.
Around 35 million taxpayers who are on PAYE will be able to check and update their income, allowances, reliefs and expenses digitally via their online personal tax account or through the HMRC app.
HMRC is aiming for at least 90% of customer interactions to be digital by 2030 as it seeks to streamline its services. This currently sits at 76%.
The new online service will save the government around £50 million a year, equivalent to almost 1,500 full-time nurses, it claimed.
It is part of a transformation roadmap announced today (21 July), which sets out more than 50 measures to streamline the tax system.
The measures will support HMRC to become a “digital-first” organisation where the HMRC app is the first point of contact for customer queries.
There will be a “more straightforward and secure” log-in process and the service will be enhanced by AI-powered assistants, voice biometrics and personalised digital experiences, the government said.
HMRC caseworkers will have access to an automatic document identifier that will help them to identify fraudulent documents through a biometric “likeness-liveness” check.
James Murray, the exchequer secretary, said: “We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers.
“By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.”
HMRC estimates the UK’s “tax gap” for 2023-24 is 5.3% of total tax liabilities, or £46.8 billion. This means it collected almost 95% of all tax owed, but is “determined to reduce” the amount left unpaid.
As part of the government’s Spending Review last month, the department will receive £1.7 billion over four years to fund thousands more compliance and debt management staff.
Some of the first measures to be rolled out include extended SMS confirmation services for self-assessment appeals and complaints; expanding a voice biometrics pilot; and allowing parents the choice to pay the High Income Child Benefit Charge through their tax code without registering for self-assessment.
HMRC is also stepping up how it tackles disguised employment or tax avoidance through umbrella companies, with new legislation set to come into effect in 2026.
JP Marks, HMRC’s chief executive and First Permanent Secretary, added: “The government’s ambition is for a simpler tax and customs system and this roadmap sets out how HMRC will deliver a first-class experience that feels different to their customers.
“By 2030, UK citizens will experience a tax administration system that is more automated, more focused on self-service, and better set up to get things right first time so they can fulfil their tax obligations.”
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