Her Majesty’s Revenue and Customs will next month begin tendering for new contracts to replace its much-criticised Aspire contract.
The department has announced that it has reached agreement with existing suppliers Capgemini and Fujitsu to end the existing £10bn Aspire contract earlier than planned.
It said that the existing contract – which underpins the annual collection of around £500bn in tax income – will be broken up into a series of smaller deals.
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HMRC chief executive Lin Homer said: “HMRC’s ambition is to be one of the most digitally-advanced tax authorities in the world, and the agreement we have reached to exit the Aspire contract brings that a huge step closer.
"Our new approach enables HMRC to secure the adaptable, cutting-edge IT services we need to transform our services to customers and modernise the way we work, at much better value for money for the taxpayer.”
The Aspire contract had been due to end in 2017. In 2014, the National Audit Office said that HMRC was overly dependent on the technical capability of the Aspire suppliers, which limited its ability to oversee the deal, and said there had been a “lack of rigour” in HMRC's management of the contract.
HMRC will look to place some of the new contracts with small and medium enterprises and will bring some ICT services and staff in-house during the closure of the Aspire contract.