HMRC takes recent tech contract spend over £1bn with ‘new build’ services deal for Making Tax Digital

Department has awarded a quintet of major technology deals in the past three weeks via the £3bn DALAS framework, created to help modernise digital services and upgrade underlying legacy infrastructure

HM Revenue and Customs has confirmed details of the final contract in a quartet of major engagements covering upgrades and the creations new platforms across the sweep of the department’s service areas.

The deals, which are numbered from one to four, are all grouped under the banner of  “digital platforms new build” services. The department recently released details of numbers two to four, respectively covering HMRC’s online services in the areas of: borders and trade; customer strategy and design; and customer support. The contracts, which could be worth a cumulative total of £541.6m, were awarded to Accenture, IBM, and Netcompany.

It was reported at the time that the other agreement in the set had been awarded to Capgemini – which has now been confirmed as the winning bidder in newly published procurement information. Commercial documents further reveal that the first-numbered contract will cover services related to HMRC’s Making Tax Digital regime.

The MTD support deal, which came into effect on 13 May, could be worth as much £263.1m, encompassing up to £146.1m over the contract’s initial three-year term, plus a potential £117m in extra spending if the agreement runs a further two years. HMRC expects to spend £47m in the first 12 months of the contract.

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As with the first three new-build engagements, Capgemini was awarded the deal through the recently finalised DALAS framework: a £3bn buying vehicle dedicated helping HMRC upgrade digital services and modernise underpinning legacy systems in the coming years.

The procurement notice states that the Making Tax Digital deal covers “large-scale digital, integration and development [of] new build services through the DALAS framework to bring in professional services to allow for the creation of multiple disciplinary and agile delivery teams across HMRC’s Digital Delivery Centres”.

As well as securing a spot as one of the department’s new-build partners, Capgemini also recently won a near-£250m deal – also through the DALAS framework – to support HMRC’s key tax platform, which houses almost 1,000 discrete services, including more than 100 applications used by citizens.

As well as the Multi-Channel Digital Tax Platform, also covered by that contract is support and upgrade work for a Customer Insight Platform that collates data on millions of customer interactions and transactions. Also currently in scope is the outgoing Government Gateway online account infrastructure that, since its launch 23 years ago, has registered more than 50 million people as users. The platform is in the process of being replaced by the government-wide One Login tool.

Across the five contracts it has signed in the past three weeks, HMRC is projecting a total outlay of up to £1.05bn between now and 2029. Almost half of this amount – £508.6m – could be spent with Capgemini.

Sam Trendall

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