HMRC announces agreement to exit its £10 billion IT contract

HM Revenue and Customs (HMRC) today announced that it has reached a final agreement with its major IT suppliers on the phased exit of the £10 billion Aspire IT contract, which ends in 2017.

Under the agreement reached with Capgemini and Fujitsu, HMRC will complete the phased exit from a single, overarching IT contract, by breaking it into to a series of smaller, more flexible contracts with existing and new suppliers, and expects that the contracts will be of interest to smaller and medium-sized companies, as well as the larger providers. Starting next month, HMRC will be going to market for a number of IT services.

This approach of smaller, more flexible contracts with multiple suppliers will enable HMRC to deliver a ground-breaking digital strategy by taking advantage of emerging technologies such as open-source software and cloud services. This will provide better value for money for taxpayers, while ensuring that HMRC’s systems remain safe, secure and reliable as they continue to process more than £500 billion of annual tax revenues.

HMRC is also bringing some existing IT services and staff in-house before the end of the contract in 2017, which will provide stability during the phased exit from Aspire.

HMRC expects to save around 24% (£200 million) a year by 2020-21 on the provision of like-for-like IT services, against a £854 million total IT spend in 2014-15.

HMRC will also be investing an additional £1.3 billion over five years in its transformation programme, to make it quicker and easier for the majority of individuals and businesses to manage their tax affairs online. This additional investment was provided for in the 2015 Spending Review.

Lin Homer, HMRC’s Chief Executive, said:

“HMRC’s ambition is to be one of the most digitally-advanced tax authorities in the world, and the agreement we have reached to exit the Aspire contract brings that a huge step closer.

“Our new approach enables HMRC to secure the adaptable, cutting-edge IT services we need to transform our services to customers and modernise the way we work, at much better value for money for the taxpayer.”

HMRC has already launched exciting and innovative online services that are quicker, lower cost and have tax compliance and security built-in.

New Personal and Business Tax Accounts – which work like online bank accounts, allowing customers to deal with all their tax affairs in one place – are already available to 45 million personal customers and five million businesses.

HMRC has a network of Digital Delivery Centres – hi-tech innovation hubs – based across the UK. These developed an online tax credit renewals service used by more than 750,000 customers last year, with customer satisfaction rates reaching 90%.