HMRC’s Inability To Part With Capgem

There is something profoundly dispiriting about a government department promising to break up an old outsourcing relationship, and then continuing to hand the same supplier billions of pounds.

That is the uncomfortable lesson from HM Revenue & Customs and Capgemini.

The figures are extraordinary. Research by The Register, using HMRC's own published transaction data, found that the tax authority paid Capgemini at least £4.2 billion across 15,726 transactions between 2014 and July 2026. Sixteen months of data are missing, meaning the true figure could be higher.

And this is not simply an argument about one contract. It is about the ability of the state to learn from its own experience.

HMRC's original Aspire outsourcing arrangement with Capgemini began in 2004. It was supposed to be a ten-year deal. Instead, it became a sprawling technological dependency. By the time Aspire was due to end in 2017, the National Audit Office estimated that HMRC would have spent £10.4 billion, against the £4.1 billion figure used when Capgemini's bid was evaluated. The NAO said HMRC had not market-tested significant elements of the arrangement and that benchmarking indicated it had paid above-market prices for some work.

The lesson appeared obvious: disentangle the department from the contractor, bring greater control in-house, diversify suppliers and make future contracts shorter and more flexible.

HMRC itself said precisely that.

Its 2015-16 annual report described a phased exit from Aspire, with more development and delivery brought under HMRC's direct control. It said this would provide greater flexibility and control over its digital strategy.

Yet the divorce has proved remarkably amicable.

Capgemini continued to win lucrative work supporting systems associated with its former empire. In 2022, HMRC awarded it a £51 million contract for tax-system support. It subsequently received a deal worth up to £214 million for maintaining legacy applications, followed by a contract worth up to £245.5 million in 2024. A separate five-year agreement to operate two major tax platforms runs to 2029 and is valued at between £403 million and £574 million.

Then came the latest twist. In 2026, Capgemini won HMRC's contact-centre contract, worth up to £500 million, with a basic term running to 2034 and extensions capable of taking it to 2036. The official procurement notice confirms the two possible one-year extensions.

So much for breaking up!

HMRC is entitled to say that these are new procurements, not simply Aspire being quietly extended through the back door. It says its awards comply with procurement law and that it has moved from a handful of large legacy contracts towards a more diverse supplier base.

That defence may be legally correct. It does not make the broader picture any less troubling.

The central question is not whether every individual contract was technically lawful. It is whether the taxpayer has escaped the dependency that HMRC itself identified as a problem.

There is a particularly revealing example. In 2022, HMRC awarded Capgemini a contract without prior publication, arguing that, for technical reasons, only Capgemini could provide the required services and that there was no reasonable alternative. The official procurement notice says those services were necessary to maintain business-critical systems while they were replaced, modernised or decommissioned.

That is precisely how technological dependency perpetuates itself.

The incumbent built the system. The incumbent understands the system. The incumbent is then needed to keep the system running while the government replaces it. The replacement takes time. The government cannot risk disrupting the tax system. Another contract follows.

Repeat.

This is not an argument for pretending that government can simply rip out complex computer systems overnight. HMRC collects hundreds of billions of pounds in tax and the NAO acknowledged that Aspire provided continuity of service with few significant failures.

But that is precisely why the department should have been so determined to avoid recreating the dependency.

There is also a wider political embarrassment here. Ministers increasingly talk about using the enormous purchasing power of the state to support British businesses. Yet one of the government's biggest technology purchasers remains deeply reliant on a multinational supplier whose relationship with the tax authority stretches back more than two decades.

The issue is not that Capgemini is foreign. Nor should nationality become a substitute for value, competence or competition.

The issue is choice.

A government department should be able to say: this is our system, this is our data, these are our skills, and here are several suppliers capable of competing for the work.

It should not repeatedly find itself saying: this system is too complicated, too important or too dependent on its incumbent supplier for anyone else to take over.

That is the real scandal here; not that Capgemini keeps winning contracts, but that HMRC appears to have found it extraordinarily difficult to make itself genuinely independent of one.

The taxpayer deserves better than an outsourcing relationship that refuses to die.

And if ministers really mean what they say about competition, resilience, British capability and better value from public procurement, HMRC should be among the first departments required to demonstrate exactly how it intends to end this cycle.

Because a contract that was supposed to end in 2017, yet leaves its incumbent potentially embedded until 2036, is not much of a break-up.

It is a very expensive long-distance relationship.

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HMRC Steps Up Scrutiny of UK Billionaires with Dedicated Compliance Managers

HMRC has assigned a personal compliance manager to every billionaire within its reach, in a significant tightening of oversight on the super-rich.

According to reports from mid-to-late September 2026, His Majesty’s Revenue and Customs (HMRC) has refreshed its list of billionaires to cover all those with a UK tax footprint, not only those who file personal tax returns in Britain. The move draws on HMRC data, public information, and data shared by other countries. It follows criticism from the National Audit Office and a parliamentary Public Accounts Committee, which previously highlighted gaps in HMRC’s understanding of billionaires’ affairs and noted that allocation of managers had been risk-based rather than purely wealth-based.

Customer Compliance Managers (CCMs) are senior tax professionals who act as a single point of contact. They develop a detailed picture of an individual’s finances, behaviours, and risks, review returns with intelligence from UK and international sources, and challenge underpayments through compliance checks. HMRC already used CCMs for the most complex or high-risk wealthy taxpayers (roughly 15,000 people, or about 2% of its broader “wealthy” population of those with incomes of £200,000+ or assets of £2 million+). Extending this systematically to all identified billionaires marks a clear shift.

An HMRC spokesperson stated: “We want to help all customers get their tax right, including the UK’s wealthiest people. We’ve had dedicated customer compliance managers for wealthy individuals for several years, allowing us to identify and address tax risks effectively.”

The change aims to improve grip on complex, often international structures used by the ultra-wealthy and close gaps in the tax collected from this group. Wealthy individuals as a whole already contribute a large share of personal tax receipts, but previous reviews found incomplete coverage of the very richest. This dedicated approach is expected to help ensure more accurate compliance going forward.

Given the exodus from the UK, these new roles may not be that secure! 

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HMRC’s Four Day Week Bonanza

Nearly one in ten of HMRC’s most senior staff have stopped turning up on Fridays, as the taxman’s four-day week perk has exploded while taxpayers continue to wait for answers.

Figures released to Guido’s FOI Unit show that, as of 31 July this year, 9.1% of Grade 6 officials and 9.0% of Senior Civil Servants at HMRC were working compressed hours over a four-day week.

And the perk is growing fast.

In June 2024, 1,542 full-time HMRC staff were on a compressed four-day week. By July this year, that had risen to 2,267, a 47% increase in just two years.

Among the senior ranks, the growth is even more striking. The number of Grade 6 officials on compressed hours jumped 64%, while Grade 7 numbers rose 55%. The Senior Civil Service figure increased by 37.5%.

This is overwhelmingly a management phenomenon. The numbers at the bottom of the organisation have barely shifted: Assistant Officers and Administrative Assistants on four-day compressed hours remain at around 1%.

So while the junior staff keep the machinery running, an ever-growing slice of the management ranks are squeezing the working week into four days.

The obvious question is whether taxpayers are getting an equivalent service in return.

A Cabinet Office source told Guido: “It’s often the case that staff working on compressed hours do less work overall because of the way their weekday structure changes.”

HMRC insists that isn't happening, claiming employees on compressed hours “receive no reduction in expected workload, performance standards or accountability”.

There is, however, a rather awkward problem with that assurance: HMRC cannot produce the evidence to demonstrate that the arrangement has no effect on productivity or service delivery.

Asked for any internal review of the impact on productivity, output or customer service, HMRC confirmed that it “does not hold a central assessment, review or monitoring report”.

In other words, the taxman is expanding a working arrangement across thousands of staff, including a significant and growing proportion of its senior officials, without centrally monitoring whether it actually works.

Worse still, HMRC cannot even say how many applications for compressed hours it rejects, because there is no central record of applications.

That makes it rather difficult for taxpayers to know whether this is a carefully managed workforce policy or simply another benefit being handed out with remarkably little scrutiny.

And the backdrop is hardly one of flawless performance.

HMRC's own 2024/25 accounts show that just 76.9% of customer correspondence was dealt with within 15 working days, below its own 80% service standard. At the end of March 2025, 2.29 million items of correspondence were still on hand. HMRC also managed to answer only 71.5% of callers seeking an adviser, against an 85% target.

Yet at the same time as taxpayers were waiting for the taxman to answer their correspondence, HMRC was expanding a system under which staff can work their hours across four days instead of five.

The internal guidance says employees on compressed hours work 9 hours and 15 minutes across four days, rather than 7.4 hours across five. Arrangements can last for up to five years before staff have to reapply.

Temporary arrangements can be approved by a line manager without formal HMRC involvement, while the policy itself acknowledges that such arrangements can cover periods when “not all duties of your role are fulfilled”.

And then there is the rather generous interaction with home working.

Compressed hours sit alongside HMRC's two-days-a-week home-working arrangements, meaning a Grade 6 employee could potentially be physically in an HMRC office for just two days a week — while enjoying a three-day weekend.

Bank holidays are handled with a distinctly relaxed approach too: staff are told that their entitlement is not calculated automatically and that they must “keep a manual record”.

HMRC's wider policy document says it “believe[s] that flexible working can promote work-life balance and improve wellbeing and performance”.

That may be true for employees.

But for the taxpayer, the more important question is whether flexibility for HMRC staff is being matched by flexibility, speed and competence for the people who actually fund the organisation.

HMRC's own figures suggest there is still plenty of room for improvement. The department says customer service is getting better, but its correspondence performance remains below target, with millions of pieces of correspondence still being handled and hundreds of thousands missing the 15 day standard.

Before HMRC congratulates itself on the wonders of flexible working, perhaps it should first demonstrate that the taxpayer isn't the one paying for it!

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Hypocritical Wankers!

 

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Blinkin' Flip!

 

A former tax worker who described himself as "the ultimate genocidal racist monster" has been jailed for inciting hatred online after he was exposed by a BBC investigation.

Thomas Webster was sacked by HMRC and investigated by police after comments he made to an undercover journalist in the BBC programme 'Unmasked: Extreme Far Right'.

Webster, 29, from Lapworth, Warwickshire, admitted 10 counts of stirring up racial hatred online, including ones calling for the killing and extinction of his racial "enemies".

Webster also admitted to stirring up religious hatred and another count of stirring up hatred on the grounds of sexual orientation. He was sentenced to two years at Warwick Crown Court.

In his online posts, Webster said he wanted Jewish and gay people to be tortured and executed.

Webster also said he wanted to kill all Muslims until they were "globally extinct".

In one instance, he said if a migrant hotel was placed on his road he would "prepare for murder and prison time, I am serious".

Webster was a member of the far-right group Patriotic Alternative when a BBC Wales Investigates' undercover reporter secretly recorded him at two of the group's events in 2024.

He was filmed saying that in his job at HMRC he liked to "deliberately" give non-white people "bad information which sounds interesting, like I'm deliberately trying to sabotage them".

Webster was dismissed by HMRC in February 2025, a month after the programme was broadcast.

The HMRC said it took breaches of its standards "extremely seriously" and had "robust processes" in place to investigate concerns.

"Where standards are not met, we act decisively," HMRC said in a statement.

"Following an internal disciplinary process, the individual concerned was dismissed from HMRC and ceased to be employed by the department in February 2025."

Talking to an undercover BBC reporter, Webster self-identified as a "white totalitarianist" who believed in "a world where white becomes the default human race... all other races will be extinct."

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How To Spot Money Laundering - Lesson 1

 

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