The department received a wedge of funding in the autumn budget in order to deliver a new tool it hopes will provide better support for users filing their annual returns

HM Revenue and Customs is seeking expert input to inform plans for a multimillion-pound new digital service for Income Tax Self-Assessment taxpayers.

The department received £16m funding in the autumn budget for the purposes of “modernising voluntary Self-Assessment pre-payment via the HMRC app”.

Five months on from this, HMRC has published a commercial notice informing the market that it is “considering obtaining the capability for this… new digital service from a third-party software supplier”.

The document adds that the HMRC wishes to offer an improved service for existing ITSA service users – particularly those in lower tax brackets. Doing so requires the deployment of an entirely new service, the department indicates.

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“HMRC analysis shows that taxpayers – especially those under the Making Tax Digital for ITSA threshold – would benefit from greater support to understand and meet their tax obligations; this need cannot be met by HMRC’s existing offer, and ITSA taxpayers will therefore be provided with a new digital service embedded in the HMRC app,” the notice says

Prospective providers are informed that “HMRC are considering launching a procurement procedure in summer 2025”.

“However, in advance of any procurement, we would like to undertake initial market engagement, through an RFI (request for information), with interested suppliers who can provide the capabilities required for the new digital service,” the notice adds.

Firms wishing to take part in the RFI have until 25 April to do so. After this, HMRC currently hopes to deliver the new service via a 15-month contract expected to commence around the end of June.

From April of next year, small firms, individuals and landlords with taxable annual income in excess of £50,000 will be required to use a compatible software platform to file their yearly ITSA return via the Making Tax Digital regime. In April 2027, this threshold will be lowered to £30,000.