The absorption of the Valuation Office Agency into HMRC: What it means for UK property owners

In a quiet but significant shift within the UK tax administration framework, James Murray – the Exchequer Secretary to the Treasury – confirmed in a written ministerial statement this week that the Valuation Office Agency (VOA) will be fully integrated into HM Revenue & Customs (HMRC) by April 2026. While this may appear to be an internal bureaucratic reorganisation, the implications for landowners — particularly those with complex holdings or development potential — could be significant.

The VOA is a government agency responsible for providing valuations and property advice for various taxation and benefits purposes. It also offers valuation and surveying services to public sector bodies.

Its work underpins key taxes, including:

• Council tax (for domestic properties)
• Business rates (for commercial property)
• Stamp duty land tax (SDLT)
• Property valuation for capital gains tax (CGT) and inheritance tax (IHT)

In addition to its tax-related work, the VOA plays a key role in non-tax valuation matters. For example, it provides valuations for Right to Buy discounts for council tenants, compensation assessments under compulsory purchase orders, and rental valuations for housing benefit claims. These functions ensure the fair treatment of individuals and local authorities in situations involving government-supported property transactions or benefits.

Historically, the VOA has operated with a degree of independence, with its valuations forming the basis of taxation assessments that HMRC relies on — but does not directly control.

The integration of the VOA into HMRC is part of a wider government initiative to streamline operations, improve data sharing, and enhance enforcement capabilities. The aim is to create a more unified tax authority where valuation data, ownership records, and tax compliance information can be seamlessly combined.

The integration is expected to streamline the leadership structure, with most operational staff transferring into HMRC. As such, we do not anticipate any immediate disruption in how valuations are carried out. However, the CLA’s concern lies in the potential shift in attitude that may follow.

At present, the VOA operates with a degree of independence, and its valuations are generally viewed as impartial. Once its functions are absorbed into HMRC, an important question arises: will district valuers face pressure to adopt a more assertive or revenue-focused approach, especially given HMRC has dramatically increased the number of IHT investigations in recent years, with 3,961 cases being opened in the 12-month period ending 5 April 2025.

This cultural change would add to the uncertainty faced by businesses. Detailed plans of the transition, with adequate resourcing, would be needed to alleviate concerns within the industry, at a time when commercial property looks towards a business rates revaluation in 2026-27.

For landowners relying on agricultural property relief (APR) and business property relief (BPR), the accuracy and basis of valuations will become even more crucial as HMRC may become more inclined to challenge valuations particularly given the increased stakes under the proposed cap on IHT reliefs. This is likely if there is development value where IHT APR is claimed on let land, and BPR is not available to cover the increased value. It is also relevant for other business assets, include those of tenant farmers, as previous guidance from HMRC to use the book values for assets such as machinery and livestock for 100% BPR claims will no longer be relevant and a market value of these assets on the date of death will be needed.

A consolidated HMRC-VOA may have more capacity to challenge taxpayer valuations as a result of additional investment in compliance staff as announced in the budget last autumn. With enhanced data sharing within the enlarged department and the adoption of new technology, such as AI, HMRC is likely to have a greater ability and appetite to review land use and challenge relief claims, especially in cases with valuations near thresholds or involving subjective classification of land use (such as lifestyle farming or DIY livery operations). Landowners may therefore need to rely even more on their own professional advisers to challenge valuations in cases of dispute.

While the merger of departments itself may be presented as administrative move, it could serve as a stepping stone to broader policy reform. A consolidated valuation function within HMRC would provide the infrastructure to support future initiatives such as a land value tax or the abolition of the CGT uplift on death — both of which depend heavily on accurate, real-time land and property valuations.

The absorption of the VOA into HMRC represents more than just a departmental merger. It signals a move toward a more data-driven, centralised enforcement approach — where valuation, tax compliance, and land use are increasingly inseparable. Staying proactive, well-advised, and good record keeping will be essential moving forward.