HMRC Data Collection Changes | What Employers, Self-Employed & Others Need to Know
Changes to how HMRC collects data, commencing with the current 2025-2026 tax year, will have far reaching consequences for employers, the self-employed, owner-managed businesses, tax agents and payroll software providers.
The submission of supplementary data to the Tax Authority is expected to expand the scope for potential HMRC tax and compliance investigations as the enhanced information disclosures by taxpayers will provide HMRC with a broader basis for initiating targeted tax investigations and enquiries.
HMRC requires additional information to be provided via Income Tax Self-Assessment and real-time returns completed by employers.
HMRC has stated that its objective is "to improve the quality of data collected by HMRC, to provide better outcomes for taxpayer and businesses, as well as improving compliance, resulting in a more resilient tax system."
Improved data matching from the additional information provided will allow HMRC to more effectively identify cases for investigation. The new information will provide HMRC with a stronger foundation for risk-assessing claims and launching tax investigations where necessary.
Previously, HMRC collected data on customers from a range of taxes, both directly through tax registrations and Companies House, the quality of which varied greatly and was often inaccurate, incomplete or out of date. HMRC states that it seeks to reduce administrative burdens placed on its customers.
Nazaqat Maqsoom of KANGS sets out the nature of the new requirements.
HMRC Data Provision Requirements
Self-employed individuals are required to provide information regarding the commencement and cessation dates of their self-employment through their Self-Assessment returns.
Employers are required to provide more detailed information on the hours worked by employees through Real Time Information PAYE reporting.
Shareholders in owner managed businesses are required to report in their Self- Assessment return the amount of dividend income received from their own company(ies) separately from any other dividend income received in addition to and also the percentage shares they hold in their own company(ies).
Ensuring Compliance with HMRC
Whether you are a self-employed individual, employer or a shareholder in an owner managed business, it remains an essential duty to disclose all income and financial gains from whatever source to HMRC.
The need for the maintenance of current, clear and accurate records of all trading activity including incoming money and receipts for expenditure remains essential.
HMRC continues the pursuit of its statutory obligation to recover all taxes of all nature which are properly due and will not hesitate to commence an investigation, impose fines and, where necessary, prosecute those in default.
How Can We Assist?
The team at KANGS regularly provide assistant to individuals and businesses facing a HMRC investigation or involved in tax dispute with HMRC with HMRC.
Tax Regulations are constantly changing and our specialist solicitors remain vigilant to such developments and challenges as they arise. If you have been contacted by HMRC or have concerns regarding your tax affairs, contact us and speak to our tax solicitors for confidential and discrete advice.
Please feel free to reach out to our team using the details below, who will be happy to hear from you.
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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