HMRC's Digital Progress, a Major Court Ruling, and New Powers on the Way

If you run a business, work as a sole trader, or sit on the board of a company, this week brings a mix of news worth knowing about. HMRC has published an update on its digital progress, the Supreme Court has handed down an important ruling for partnerships, and new consultations are underway that could affect how tax debts are collected in future. Here's what it all means for you.

📱 HMRC's digital push, how far has it come?

Back in 2025, HMRC set out a goal to become a fully digital organisation, aiming for at least 90% of taxpayer and agent interactions to happen online by 2030. The latest progress update shows that in 2025 to 2026, 78% of taxpayer interactions were through digital or self-serve channels, up from 76% the year before.

That's steady progress, but not without criticism. The Institute of Chartered Accountants in England and Wales (ICAEW) has pointed out that digital services for agents still lag well behind what's available to taxpayers directly. In plain terms, HMRC's own systems for interacting with your accountant haven't kept pace with the tools available to individuals and businesses.

The government has acknowledged there's more work to do, while remaining confident that HMRC is heading in the right direction. For you, this mostly means continuing to expect more online tools, digital accounts, and self-service options over the coming years, alongside the occasional frustration when things don't quite work as smoothly as promised.

⚖️ A major ruling for partnerships and LLPs

The Supreme Court has issued its decision in a case called BlueCrest Capital Management, and while the case itself involved a specialist investment firm, the ruling matters for any business operating as a Limited Liability Partnership, or LLP.

Here's the background. Under what are known as the salaried member rules, LLP members can end up being taxed as employees rather than as self-employed partners, unless they meet certain conditions. One of those conditions relates to whether a member has "significant influence" over the partnership's affairs.

HMRC's long-standing guidance suggested that this influence could come from what happens in practice, day to day, even if it wasn't formally written into the partnership agreement. The Supreme Court has now firmly rejected that approach. Influence only counts, for tax purposes, if it's grounded in a member's legally enforceable rights under the LLP's own governance documents, and it needs to relate to the partnership as a whole, not just one part of the business.

What this means for you, if you're a member of an LLP:

• Review your LLP agreement and governance framework to check whether members' actual influence is properly reflected in the written terms
• Consider whether informal arrangements, committee memberships, or delegated authority need to be formally documented
• Be aware that HMRC's existing guidance on this point is now out of step with the law and will likely be updated in due course

📋 What's coming down the track from HMRC's Tax Update

HMRC's 2026 Tax Update included a batch of consultations, and two in particular are worth flagging early.

The first proposes a new criminal offence for making reckless, untrue statements or declarations in relation to direct taxes, such as Income Tax and Corporation Tax. At the moment, this kind of offence already exists for indirect taxes like VAT, but not for direct tax. The government wants to close that gap, giving prosecutors a middle ground between doing nothing and pursuing a full dishonesty charge, for cases where someone has been careless or reckless rather than deliberately dishonest.

The second proposes extending HMRC's powers to collect lower-value tax debts by taking monthly instalments directly from a taxpayer's UK bank or building society account. This would apply to people who can pay but have repeatedly failed to respond to HMRC's attempts to contact them.

Both are currently out for consultation, so nothing is law yet, but they signal a clear direction of travel: HMRC is looking to modernise its enforcement toolkit and take a firmer line on both accuracy and unpaid debts.

⚖️ A major ruling for partnerships and LLPs

The Supreme Court has issued its decision in a case called BlueCrest Capital Management, and while the case itself involved a specialist investment firm, the ruling matters for any business operating as a Limited Liability Partnership, or LLP.

Here's the background: under what are known as the salaried member rules, LLP members can end up being taxed as employees rather than as self-employed partners, unless they meet certain conditions. One of those conditions relates to whether a member has "significant influence" over the partnership's affairs.

HMRC's long-standing guidance suggested that this influence could come from what happens in practice, day to day, even if it wasn't formally written into the partnership agreement. The Supreme Court has now firmly rejected that approach. Influence only counts, for tax purposes, if it's grounded in a member's legally enforceable rights under the LLP's own governance documents, and it needs to relate to the partnership as a whole, not just one part of the business.