After all the leaks and speculation, the Autumn Budget 2025 is here, bringing with it a forecast that promises an all-time high tax take of 38% of GDP in 2030/31. Although the expected freezing of income tax thresholds is doing much of the heavy lifting (bringing in an estimated further £12.4bn per year by 2030/31), there are a raft of further measures that have been announced aimed at closing the tax gap. 

The tax gap for the 2023/24 tax year has been estimated at £46.8bn (or 5.3%), and it is anticipated that the measures announced in the Autumn Budget 2025, when combined with those set out in the Autumn Budget 2024, will reduce the gap in 2029/30 by £10bn a year. This is a significant reduction, and the bulk of it will have to come from small business, which are estimated to be responsible for 60% of the tax gap.

Of the additional £10bn per year in 2029/30, £2.4bn is estimated to be brought in from the measures in the current Budget, increasing to £2.6bn in 2030/31. Over £1bn in 2030/31 is to come from improving data on interest and card sales, and from further investment in HMRC’s debt management capacity. Another big-ticket item is the estimated £350m a year for requiring in-scope multinationals to file an International Controlled Transactions Schedule (ICTS) with HMRC on an annual basis. The ICTS was consulted on in the Spring, and it is intended to capture specific information about cross-border related party transactions in a standardised format, which will then be used by HMRC for automated risk profiling and manual risk assessment.

Although the Budget, of course, refers to tackling avoidance and evasion, the reality is that this makes up a much smaller portion of the tax gap (although tax gap figures do not include the full offshore tax gap), and so measures targeted directly at these behaviours are estimated to bring in a lower amount of approximately £255m per year by 2030/31. 

Of these, perhaps the most interesting is the “strengthened reward scheme” for informants of high value tax evasion or tax avoidance that had been trailed in the Spring. This “whistleblower scheme” is intended to mirror the type of scheme that applies in the US and provides that informants could receive rewards of up to 30% of the additional tax payable. The scheme applies a threshold of £1.5m before any reward would be payable and is subject to a number of caveats, not least that any rewards are at HMRC’s discretion. Nonetheless, it marks a significant change from the existing scheme where rewards are not linked to the additional tax collected. By way of comparison, in 2024/2025 rewards paid to whistleblowers were slightly above £850,000. Under the new scheme, with additional tax expected to be £65m in 2030/31 (peaking in 2029/20 at £95m per year), this could mean rewards being paid of up to £30m a year. With such rewards on offer, it is likely that the test for HMRC will be in identifying the most likely targets from the large number of disclosures they may well receive.

The clamp down on umbrella companies and targeting of promoters that were expressly referenced in the Budget speech are not included within the £2.6bn figure. This is because the umbrella companies were addressed in the 2024 Budget, and the new powers to close in on promoters of marketed tax avoidance are to be legislated for in Finance Bill 2025-26, with a consultation in early 2026.

On the topic of consultations, the Budget states that the Government has decided not to regulate tax advisers, but it will require tax advisers to register with HMRC and meet minimum standards (which, it must be said, has some similarities to regulation), and it will be moving ahead with legislating for enhanced powers and sanctions to tackle tax advisers who facilitate non-compliance. The enhanced powers will make it easier for HMRC to obtain information from tax advisers where they suspect they have facilitated non-compliance, and sanctions will include a new penalty framework where a tax adviser has deliberately facilitated non-compliance. In total, it is estimated to bring in £55m by 2030/31.

Ultimately, while there are a lot of measures in play, reducing the tax gap by £10bn per year in just five years, relies heavily on investment in additional staff to increase the collection of tax due and overdue, and it is unclear how this recruitment and training is progressing.