HMRC seeks £9m partner to support transformation of debt management

Department details plans to replace legacy systems and enable new government-backed services for citizens in financial difficulty

Credit: Pixabay/Michal Jarmoluk

HM Revenue and Customs is seeking a commercial partner to support a multimillion-pound programme of work over the next three years to transform its debt-management services and systems. 

The department last year took on responsibility for administering government’s new Debt Respite service – commonly known as the Breathing Space scheme. The service allows citizens with problem debts to apply for legal protection from creditors for up to 60 days, during which time interest and other charges will also be frozen. Specialist mental health crisis breathing space arrangements are also available, lasting for as long as crisis treatment is ongoing, plus an extra 30 days beyond that time.

From 2024, this service will be supplemented and supported by another new government scheme to be delivered by HMRC across England and Wales: the Statutory Debt Repayment Plan (SDRP). This service will allow citizens struggling with debt to establish, via a third party, a statutory agreement through which money can be repaid via a “manageable timetable” and without the kind of punitive terms they might otherwise be subject to.

Provisions for both these new services were made in legislation introduced in 2020. 

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To support their implementation, HMRC is undertaking a transformation programme through which it aims to upgrade legacy IT systems and revamp digital services across its debt-management operations.

The department has issued a contract notice seeking a specialist digital supplier to support its work over the course of an initial two-year contract worth up to £4.5m a year. An optional six-month extension could take the total value of the engagement to more than £11m.

The contract is scheduled to come into effect in November, after which work will take place to replace and, ultimately, decommission HMRC’s incumbent “legacy debt management system where change is time consuming and costly”.

The department also wishes to “reduce [the] manual processing” currently required to support the breathing space service by developing automated software processes.

HMRC hopes that this will “pave the way” for subsequent work to implement IT systems to support the delivery of the SDRP scheme.

The government-backed debt-repayment instrument will also require the tax agency’s digital teams to develop new “IT payment services that will transform the payment experience: making it easier for customers to pay, supporting customers who are in financial difficulty, and taking action with those avoiding payment”.

The debt services transformation programme is currently in beta phase, and the chosen provider will work alongside civil servants and other suppliers to support its ongoing delivery.

The winning bidder should expect to operate under a hybrid working arrangement, combining homeworking with working from either their own offices or HMRC’s facilities – primarily its locations in Telford and Leeds, but with travel to other officers around the country likely to be required.

Bids for the contract are open until midnight on 29 August.


Sam Trendall

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