The digitisation of tax: what does it mean for my business?

The UK Government is moving ahead with its digitisation agenda for tax. From Making Tax Digital (MTD) to major reforms at Companies House, these changes are designed to make business reporting more accurate, transparent, and secure.  

But what does all this mean for businesses and their directors? HMRC’s Transformation Roadmap brings it altogether. Here’s what you need to know. 

What is the digitisation agenda for tax? 

Digital by default 

HMRC will stop sending letters by post in most cases. Most tax information and contact from HMRC will become digital. Day to day management of your tax affairs will be via the GOV.UK website, other HMRC content online or HMRC’s app. 

This will be a culture change for HMRC, taxpayers, accountants and tax advisers but HMRC intends it to be more efficient, transparent and make it easier for them to detect fraudulent activity.  

The target is for 90% of customer interactions to be digital by 2030, known as the Digital First strategy. The Government plans to achieve this with more automation and AI powered tools for customers online, such as tailored ‘nudge’ messages to remind you to complete information already started and AI chatbots to answer common questions. 

The simplification of login procedures across HMRC, Companies House and other Government services has already begun. GOV.UK One Login will become the standard login format across most government services. Government Gateway accounts will all be migrated to GOV.UK One Login and new users are now offered GOV.UK One Login accounts. 

Digitally excluded taxpayers 

Ther roadmap commits to targeted support for digitally excluded taxpayers and those with complex tax affairs. Paper communications and phone contact will be retained for digitally excluded taxpayers. Education support packages will be designed and rolled out for pensioners and small and medium-sized businesses (SMBs). 

What is the timeline for the next batch of changes? 

The changes and updates completed by the end of the 2025/26 tax year are: 

• PAYE online – an online service to allow PAYE taxpayers to check their tax position and allow them to update HMRC directly of income changes. 
• PAYE expenses – using pre-populated data. 
• Deregistering for self-assessment online. 
• Those newly liable for the high income child benefit charge who are employed can now pay it through their PAYE tax code. 
• Confirmation messages to taxpayers to show claims have been received by HMRC, to reduce the need for chasing calls e.g. self-assessment appeals, complaints, PAYE queries. 
• Tracking for child benefit claims/payments. 
• Biometric technology will allow voice recordings of taxpayers to be used as ID verification. 

Changes to be made from 2026 and beyond include: 

• MTD for income tax, which began on 6th April 2026 
• Pre-population of self-assessment data with child benefit information from April 2026
• Digital Inheritance Tax service online from 2027/28 
• Online National Insurance Contributions (NICs) refunds are now available
• Income tax and NICs positions available in digital accounts 
• New AI service for the Online Trade Tariff from 2027/28 (import/exports) 

Which changes affect communications between HMRC, clients and their tax agents? 

New systems will allow three-way communications between taxpayers, their agents and HMRC, with agents able to track to the progress of their clients’ cases online.  

Tax agents will be able to deregister their clients from self-assessment and submit clients’ tax code information digitally.  

A dedicated escalation route has been piloted for agents with self-assessment or PAYE queries for their clients which are more than four weeks old. 

What are the Companies House reforms? 

Extensive reforms are underway for Companies House following the Economic Crime and Corporate Transparency Act 2023. They aim to cleanse the quality of data on the Companies House website, improve its trustworthiness, reducing the fraudulent use of the register and making UK company data more transparent. Some reforms that were previously announced - software-only filing of company accounts with Companies House, and mandatory filing of Profit and Loss statements by all companies, regardless of size - have been postponed. Previously it had been announced that both reforms were due to begin from April 2027. Companies House stated in May 2026 that it would be able to share a further update 'very soon'.

For detail on these reforms please see our article here. 

Is HMRC sharing my data with others? 

HMRC already shares the data it holds on taxpayers with the Home Office, the Office for National Statistics and Social Security Scotland. Under the roadmap it plans to expand this data sharing and create a National Data Library to share data with other Government departments, exchange information relating to cryptoassets and online platforms, and build a pilot with US Customs and Border protection to speed up goods trading between the UK and US. 

Tax and business systems are becoming more integrated. HMRC and Companies House are now sharing their data more than ever and more sharing between HMRC, banks and payments infrastructure is underway. 

What does this mean for business owners and company directors? 

The Government states that legitimate businesses trying hard to get their tax right should have an easier time under the new digitally enhanced services, as HMRC dedicate more focus to those with complex affairs and those deliberately trying to evade tax. 

Sole traders and landlords 

If you are a sole trader or landlord and have not already done so, now is the time to understand when you must move to MTD for Income Tax. Those with £50,000 of qualifying income must register and join from 6th April 2026. The first quarterly update must be sent from MTD-compliant accounting software by 7th August 2026 to avoid any late filing penalties.

Other upcoming changes include: 

• Trading income reporting threshold to be increased from £1,000 to £3,000. 
• Property/other income reporting threshold to also be increased to £3,000. 
• A digital service created to report these similar small income streams, including side hustles. 

Company directors 

From 17th November 2025, company directors and People with Significant Control (PSCs) must verify their ID for Companies House in order to continue filing statutory returns. Penalties and disqualification could result from non-compliance. 

‘Upstream interventions’ will be added to VAT and corporation tax return processes with AI-powered nudges and prompts to get more accurate returns. 

Employers 

Mandatory payrolling of benefits in kind for employees has faced delays but is now due to begin from April 2027. This means subjecting employee benefits to PAYE and NICs (employer’s and employees’) via the payroll instead of reporting on form P11D and only applying Class 1A NICs. 

How TaxAssist Accountants can help 

For help implementing any of these changes or simply understanding what the digital transformation means for your business, call TaxAssist Accountants on 020 3988 0580 or contact us here. 

Last updated 19 May 2026 | First published 11 Dec 2025

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Helen Wood, CA

Helen is a qualified chartered accountant (CA) and joined TaxAssist in 2025 following three years as a freelance content writer for clients in the tax and accounting publishing sector. Prior to this, She spent 17 years at Big Four and Top 10 accountancy firms. Helen writes clear and helpful articles on tax and accounting for businesses and individuals.

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