Updated The UK’s Treasury ministry is to determine the fate of aging SAP software that runs the nation’s tax system – processing £750 billion ($968 billion) of transactions a year – over the coming weeks.
The incoming Labour government faces the task of deciding the future of the technology supporting tax collection, which currently runs on a “highly customised version of the SAP ECC 6.0 commercial software package.”
Mainstream support for ECC 6.0 ends at the close of 2027, giving His Majesty’s Revenue and Customs (HMRC) just less than three and a half years to complete a move to SAP’s latest system – based on S/4HANA – or to a system from a competitor, most likely Oracle.
Among SAP users and advisors, it is widely thought that because of the lengthy planning and implementation timelines, any large organization that has not begun work to move from ECC to S/4HANA will struggle to do so before the mainstream support deadline. Even achieving the transition before the end of extended support – which only offers updates for security and stability at a 2 percent premium – could be very challenging, according to Jens Hungershausen, chairman of the German-speaking user group DSAG.
Last week, HMRC awarded Capgemini a contract worth up to £574 million ($741 million) to run legacy tax management systems until 2029. This includes “run and change” services for Enterprise Tax Management Platform (ETMP), the main tax platform. It does not include a platform upgrade.
Officials said HMRC had been undertaking detailed planning on how to meet the challenge of SAP ECC 6 support ending in 2027 and what that means in ensuring continuity of service for ETMP, which runs the accounting systems of more than 40 taxes and benefits, managing £750 billion of transactions each year.
“Next steps are subject to ministerial approval,” the official said.
Capgemini began work on ETMP under the Aspire contract, which began in 2004 and was set to run for 10 years. Although Aspire formally ended in 2017 after a three-year extension, support for ETMP was one of the elements further extended until 2020.
In January 2022, HMRC awarded Capgemini a £51 million agreement to continue supporting UK tax systems including ETMP until December 2024.
The latest contract was awarded under the RM6100 framework, a joint purchasing arrangement that is estimated to be worth a maximum of £2 billion, also known as Technology Service 3.
HMRC has yet to say whether there was a “mini-competition” within the framework or whether the notice for competition was published.
One official said the Capgemini award was made “following a competitive tender process.”
The Register has repeatedly asked HMRC to comment. ®
Updated at 12.03 UTC on July 23, 2024, to add:
Following publication of this article, HMRC finally made contact. A spokesperson told us:
“As we modernise our IT estate, we’ve awarded a contract to support our Enterprise Tax Management Platform (ETMP) and Enterprise Operations Platform (EOPS) following a competitive tendering exercise.
“These systems play a crucial role in supporting internal capabilities and administering tax regimes, enabling the department to cover more than £750 billion tax transactions annually.”
