Committee publication · Correspondence · 14 July 2026

Correspondence from HMRC on HMRC Annual Report and Accounts 2026, dated 9 July 2026

Summary

HMRC's Chief Executive writes to the Treasury Committee transmitting HMRC's Annual Report and Accounts for 2025-26, published 9 July 2026. The letter highlights first-year progress on a five-year transformation: £966.4 billion in tax revenues collected, compliance yield exceeding £50 billion, recruitment of 1,600+ compliance officers, meeting telephony performance targets for the first time since 2017-18, and 78% of customer interactions now digital. It addresses legacy issues including PAYE repayment fraud, State Pension taxation errors, and National Insurance registration gaps, while detailing modernisation of systems and security improvements.

Key findings

HMRC raised tax revenues of £966.4 billion in 2025-26 (up £90.4 billion year-on-year) and delivered highest compliance yield of over £50 billion
Telephony performance target met for first time since 2017-18, with 85.1% of calls answered; tax debt reduced from 5% to 4.7% of receipts
Recruited 1,600+ compliance officers against target of 5,500 by 2030; 78% of customer interactions now digital; Making Tax Digital for Income Tax now live
Retired 50-year-old VAT mainframe, migrated services to cloud platforms, and establishing new Fraud Prevention Centre to address identity fraud and strengthen resilience
Addressing legacy issues: PAYE repayment fraud (no customer financial loss), State Pension taxation error affecting pensioners, and Class 2 National Insurance registration gaps in Self Assessment system

Tone

Procedural

Topics

tax-compliancepublic-financecybersecuritycustomer-servicefraud-prevention

Key actors

John-Paul Marks (HMRC Chief Executive and First Permanent Secretary), Dame Meg Hillier (Chair of Treasury Committee), Comptroller and Auditor General, National Audit Office, Public Accounts Committee, Valuation Office Agency, Department for Work and Pensions

Notable line

“My aim is that HMRC fixes problems quickly when they arise and addresses underlying causes to ensure sustained confidence in our work.”

Key Quotes

“In 2025-26, we raised tax revenues of £966.4 billion, an increase of £90.4 billion on the previous year and delivered the highest compliance yield HMRC has achieved, bringing in over £50 billion to the Exchequer that would otherwise have been lost.”
— John-Paul Marks · outlining core revenue collection performance

“I am pleased to report that we have also made important improvements to our customer service operations and are now meeting our telephony performance target for the first time since 2017-18.”
— John-Paul Marks · reporting on customer service improvements

“Some 78% of customer interactions are now digital, and the HMRC app continues to grow as a significant channel for customers.”
— John-Paul Marks · describing digitisation progress

“I can confirm that no customer suffered financial loss because of that incident, but I recognise the concern such incidents cause.”
— John-Paul Marks · addressing PAYE repayment fraud losses

“I would like to reiterate my apology for this historic error and especially to those pensioners who have been affected.”
— John-Paul Marks · addressing State Pension taxation issue

“I am determined that HMRC will be transparent with Parliament and the public: recognising progress where it has been made, being clear where we still need to improve, and showing the action we are taking to build a high- performing organisation that can retain and build public trust.”
— John-Paul Marks · setting out HMRC's accountability stance

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Source · parliament.uk record ↗