Select committee: Public Accounts Committee
Recommendation 35
23rd Report - The cost of the tax system
Published 30 Apr 2025
Addressed to HM Treasury
Public Accounts Committee The cost of the tax system All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
Written evidence, received from Southampton University academics and accountants, Dr Md Hosam Al Kaddour and Dr Nouha Saber, recommended that HMRC accelerates digital transformation, including investment in AI–driven customer support to handle routine inquiries and thus reduce call centre costs.70 Written evidence, received from Dr Edidiong Offiong Bassey (a lecturer and researcher on taxation at Cardiff University), recommended that HMRC upskill its staff to navigate AI–driven compliance tools effectively. 65 Qq 64–66 66 Q 67 67 HM Revenue & Customs and Department for Business & Trade, Electronic invoicing: promoting e-invoicing across UK businesses and the public sector, February 2025 68 Q 67 69 Committee of Public Accounts, Use of AI in Government, Eighteenth Report of Session 2024–25, HC 356, 26 March 2025 70 CTS0005 19 Dr Bassey also recommended that HMRC should engage with the use of AI to prevent fraudulent tax technology providers from misleading taxpayers and act to prevent unregulated AI–based tax avoidance schemes.71
From: Public Accounts Committee, 23rd Report - The cost of the tax system (HC 645), 30 April 2025
Government response
The government responded to the whole report on 18 September 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it "agrees with the Committee's recommendation" on each of the report's recommendations, and reports that several are already implemented while others carry target dates.
- On simplification, the government will publish HMRC's Transformation Roadmap in summer 2025, which "will include the metrics HMRC will use to report progress".
- On trust, the government agrees with both recommendations and describes them as "Recommendation implemented", citing annual customer surveys, complaints data and focus groups.
- On compliance productivity, it says HMRC "will recruit an additional 5,500 compliance staff by March 2030", alongside other measures to close the tax gap.
- On legacy IT, HMRC "will write to the Committee" on its remediation plans, forecast cost and expected savings, with a target implementation date of September 2025.