Tax specialists are forecasting a significant wave of enforcement actions from HM Revenue and Customs (HMRC) in 2026, as the authority adopts a more aggressive, technology-driven approach to boost government revenue.
Proactive Stance and Major Investment
Under the current Labour government, HMRC's strategy has shifted decisively from being reactive to highly proactive. This change is backed by a substantial financial commitment: an additional £555m in annual funding to enhance compliance resources and modernise its technological systems. The goal of this investment is to raise an extra £5.1bn per year by the end of the current Parliament, directly targeting the UK's tax gap, which is estimated to exceed £5bn. However, a recent Public Accounts Committee (PAC) report cautioned that this figure might represent "just the tip of the iceberg".
Andy Brown, global head of tax disputes at law firm Kennedys, confirmed the expected shift. "We believe that next year we are likely to see a shift towards increased enforcement actions by national tax authorities, as well as widening the scope of current tax regimes," he stated. Brown warned that this would impact clients by increasing their exposure to investigation and, consequently, their compliance costs.
Global Trends and Geopolitical Tools
This UK-focused crackdown is part of a wider international pattern. HMRC itself plans to recruit 5,000 new compliance officers by 2029/30, with hiring set to begin in 2026. Globally, other nations are following suit; for instance, the UAE's Federal Tax Authority has increased investigations by 110.7 per cent since 2024. Furthermore, the OECD's Pillar Two initiative, which mandates a 15 per cent global minimum corporate tax rate for large multinationals, is rolling out.
Andy Brown highlighted another key trend for 2026: the use of tax and tariffs as geopolitical instruments. "The past 12 months have seen increased volatility in trade policy... driven by the tense nature of relations between world leaders," he explained. He cited the "Liberation Day" tariffs announced by US President Donald Trump in April as an example that upended international trade. Brown predicts that in 2026, "tariffs and tax policy [will] frequently be deployed as instruments to guard national financial security," creating ongoing uncertainty for global businesses.
The Rise of AI in Tax Disputes
Artificial intelligence is set to play a central role in the coming enforcement drive. HMRC is already deploying machine learning tools to identify anomalies in tax returns, while taxpayers are increasingly using AI to manage their liabilities. This technological arms race will introduce new procedural risks for clients.
"Authorities will also increasingly turn to predictive models and algorithm-based audits and assessments, capturing more breaches with greater accuracy," Brown noted. On a positive note, he added that this also presents an opportunity for businesses: "there will, however, be an opportunity for clients to increase proactive compliance and early engagement through AI." The dual use of AI promises to make the tax landscape both more efficient and more complex in the year ahead.
