The UK government has announced a significant restructuring of its property tax administration, confirming that the Valuation Office Agency (VOA) will be absorbed into HM Revenue & Customs (HMRC) by April 2026. This move, part of a broader drive to streamline public services and cut red tape, marks the end of the VOA as an arm’s-length body after more than a century of operation.
Why Is the VOA Being Merged with HMRC?
The merger is a key element of the government’s “Plan for Change,” aimed at increasing efficiency, reducing administrative duplication, and improving the experience for businesses and taxpayers. According to Exchequer Secretary to the Treasury, James Murray, integrating the VOA into HMRC will help deliver faster reforms, better value for money, and a more productive public service.
The government expects the change to deliver between 5% and 10% in administrative cost savings for the VOA by 2028-29. The VOA currently supports the collection of over £60 billion annually in council tax and business rates and provides commercial property valuation services to the public sector.
Industry and Staff Reactions
The announcement has sparked concern among property professionals and civil service unions. Critics warn that folding the VOA into HMRC risks undermining the independence of property valuations, which underpin business rates and council tax assessments across the country.
However, the government has provided assurances that there will be no redundancies as a result of the merger.
Implications for Businesses and Taxpayers
For businesses, especially those in retail and hospitality, the timing of the change coincides with broader business rates reform, adding to uncertainty. Industry groups have raised concerns that the merger could complicate the transition to new business rates systems and potentially erode trust in the fairness of property valuations.
Despite these concerns, the government maintains that the move will ultimately reduce the administrative burden on businesses and improve the customer experience as the tax system is modernised.
Looking Ahead
The absorption of the VOA into HMRC is part of a wider government review of arm’s-length bodies, following similar decisions such as bringing NHS England into the Department of Health and Social Care. As the property sector prepares for this transition, stakeholders will be watching closely to see how the merger impacts the independence, transparency, and efficiency of the UK’s property tax system.
Key Points:
- VOA to be merged into HMRC by April 2026.
- Move aims to increase efficiency and save up to 10% in administrative costs.
- Industry experts and unions express concern over loss of independent oversight and lack of consultation.
- Government promises improved customer experience and streamlined tax administration.