'Havoc' looms for UK taxman over IT switch

Tax collection in the UK could be jeopardised by fragmenting IT contracts, MPs warned, also saying that an unsuccessful transition “would create havoc with the public finances”.

HM Revenue & Customs (HMRC) faces an “enormous challenge” in replacing the established Aspire contract with short-term deals from multiple suppliers in 2017, the Public Accounts Committee (PAC) said.

Richard Bacon MP said HMRC appeared “complacent” given the scale of the transformation required for maintaining its hardware and software.

The Aspire contract between HMRC and Capgemini, which is the government’s largest technology contract since 2004, accounts for 84 per cent of the tax agency’s total spend on information and communications technology.

The contract has cost around £7.9bn over the past ten years, and according to the cross-party committee it “has provided stable systems to support the collection of taxes”.

Under new rules announced by the Cabinet Office government IT contracts are not allowed to exceed £100m, and although the move is expected to cut running costs at HMRC the MPs raised concerns over its ability to manage the change.

“HMRC’s record in managing IT contractors gives us little confidence that HMRC can successfully achieve this transition or that it can manage the proposed model effectively to maximise value for money.

“The end of the Aspire contract and the move to replace it with many more contracts and suppliers puts both the service HMRC provides to customers and tax collection at risk,” the PAC report said.

However, the HMRC was confident that it could handle the transition after the successful digitisation of tax credits and the implementation of real-time information (RTI) – the biggest change to the tax system in 70 years.

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