The Government made two announcements at the Budget as part of its ongoing Tax Administration Framework Review (TAFR) project on the correction of errors (there will be a consultation in 2026 on new HMRC powers obliging taxpayers to correct inaccuracies where they are identified) and reform of behavioural penalties. HMRC subsequently sent a detailed update on the next steps for both of these in addition to its ongoing dispute resolution reform work. Earlier in the year Chartered Accountants Ireland responded to the associated consultations on new ways to tackle non-compliance (which contained the proposals on correction of errors) and reform of behavioural penalties.
On modernising the correction of errors, HMRC is progressing work on key design elements of the proposals, including the introduction of a general obligation to correct. According to HMRC, the feedback received through this consultation indicated that this measure would be a welcome addition, hence legislation will be drafted for stakeholder input which will take place via bespoke sessions in early 2026.
On behavioural penalty reforms, HMRC is currently working through the detailed policy design, including some of the operational practicalities, ahead of moving onto drafting legislation. As this work continues, it will bring up policy choices which HMRC will discuss with stakeholders ahead of publishing any draft legislation.
HMRC has also been analysing the responses received to the consultation on improving HMRC's approach to dispute resolution and is continuing to develop options and prepare a summary of responses for publication.
HMRC is also working on launching a new quarterly update which will provide more regular TAFR news; the first edition is currently in development.
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