The tax authority has also created a dedicated small business evasion Team within its fraud investigation service, expected to employ approximately 350 specialists focused exclusively on fraud committed by smaller enterprises.

Barbara Bento, a partner at Buzzacott, notes that striking an appropriate balance will prove challenging for HMRC, warning that “overly aggressive enforcement” against those experiencing genuine financial difficulties “risks undermining long-term revenue for the Exchequer”.

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Advanced technology, artificial intelligence tools, and expanded budgets is expected to substantially boost HMRC’s ability to analyse the enormous datasets already at its disposal, resulting in a greater volume of investigations overall.

Small and medium-sized enterprises represent roughly 60 per cent of the overall tax gap, making them a central target for HMRC’s compliance efforts.

Antony Greenwood, an associate director at Buzzacott, highlighted that typical compliance failures among SMEs involve mistakes with VAT, understated earnings, and inadequate bookkeeping practices.

The hidden economy, comprising individuals and businesses whose income remains entirely undisclosed to the tax authority, will also attract intensified attention from investigators.

Mr Greenwood emphasises that HMRC’s intention is to conduct more specialised and targeted inquiries in this sector, with the newly formed Small Business Evasion Team representing a major shift in the enforcement framework.

Those operating entirely outside the tax system should anticipate considerably greater scrutiny as the revenue authority deploys its expanded resources and technological capabilities.

Property owners face mounting pressure as fresh international agreements now permit the automatic sharing of property ownership data between jurisdictions, a crucial development in addressing offshore non-compliance.

Justin Stevenson, the director at Buzzacott, noted that the construction industry, long a priority area for HMRC, will experience even closer examination in the months ahead.

Contractors working under the construction industry scheme should prepare for particular focus on their employment status classifications, record-keeping standards, and potential supply-chain fraud.

Meanwhile, the newly created abusive phoenixism Taskforce demonstrates HMRC’s commitment to pursuing repeat offenders who deliberately wind up companies to evade their tax obligationst

Ms Bento pointed out that while concrete outcomes from this taskforce may take time to materialise, heightened activity in tackling serial phoenixism is expected.

A strengthened whistleblower reward scheme, which came into effect in November 2025, is anticipated to become a major focus next year, generating high-impact investigations driven by informant intelligence.

Mark Taylor, a partner at Buzzacott, explained that the scheme links financial rewards directly to tax recovered rather than drawing from a fixed budget, with HMRC’s Fraud Investigation Service leading the initiative.

Taxpayers should brace for a wave of “nudge letters” prompting voluntary disclosure of historical tax issues, with those who ignore such correspondence facing reduced leniency and stiffer penalties.

In severe cases, uncooperative individuals risk having their details published by HMRC for up to 12 months.

Criminal investigations are projected to rise substantially, with charging decisions for the most serious fraud cases expected to increase by 20 per cent from 500 to 600 annually—by 2029/30.