HMRC Awards Capgemini £245M - A Nice Little Earner

It's time to take a hard look at the recent decision by HMRC to extend its contract with Capgemini for legacy system maintenance. The deal, worth a staggering £245.5 million, means that in just 2.5 years, taxpayers will have contributed half a billion pounds to keep the lights on at HMRC.

The Cost of Legacy Systems

Legacy systems, by their very nature, are outdated. They represent old technology, often riddled with inefficiencies and security vulnerabilities. Yet, HMRC has chosen to pour more money into maintaining these systems rather than investing in modern, efficient, and secure alternatives.

The cost of this decision is not just financial. It's a cost borne by every taxpayer in the UK, who must continue to navigate a tax system propped up by outdated technology. It's a cost to the economy, as resources that could be used to drive innovation and growth are instead sunk into maintaining the status quo.

The Role of Capgemini

Capgemini, a multinational professional services and business consulting corporation, has been tasked with keeping these legacy systems running. But at what cost? The £245.5 million contract represents a significant investment in a company tasked with maintaining, not modernising, our tax system.

While Capgemini might have the expertise to manage these systems, the question remains: is this the best use of their skills, and our money? Could these resources not be better spent on developing a tax system fit for the 21st century?

The Need for Change

It's clear that a change is needed. Rather than pouring money into legacy systems, HMRC should be investing in modern, efficient, and secure technology. This would not only save money in the long term but also provide a better service to taxpayers.

In an era of digital transformation, it's disgrasceful to see HMRC clinging to the past. It's time for them to step into the future, for the sake of every taxpayer in the UK.

In conclusion, while the decision to extend the contract with Capgemini might keep the lights on at HMRC for now, it's a short-sighted move that fails to consider the long-term implications. It's time for HMRC to stop relying on legacy systems and start investing in the future. The taxpayers deserve better.

Tax does have to be taxing.

Tax Investigation Insurance

Market leading tax fee protection insurance for businesses, sole traders and individuals. Protect yourself from accountancy fees in the event of an HMRC enquiry.

Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountant's (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your accountant (your tax return agent) to:

• Deal with any correspondence from HMRC
• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Assistant Commercial Director - IT Contract Management HMRC £96K

HMRC is offering an annual salary of £96K for an assistant commercial director - IT contract management, to oversee its engagements with IT suppliers as it nears the post-Aspire era.

The IT outsourcing deal with Capgemini and Fujitsu, which was originally due to end in 2017, is now going through a phased migration, with all services due to be retendered or brought back in house by 2020.

As per the advert:

“HMRC has recently exited the Aspire contract for IT provision with commercial staff playing a leading role,” the department said. “In doing so, it has reached a negotiated position with incumbent suppliers and activity has been undertaken to source suppliers for newly defined elements of the bought-out services. New contracts will allow the department to take better advantage of digital innovations, and keep pace with digital and technology trends of the future.”

The role, which will be based in Telford or London, comes with a salary of up to £95,950.
The successful candidate will manage a team of about 10 contract managers, and will report into the head of commercial contract management. The IT contract chief will help manage a hundredfold increase in the organisation’s supply chain.

HMRC said:

“You will play a key role in managing our supply base effectively through the IT transformation as HMRC continues to move away from the single biggest IT outsource deal in Europe, Aspire, to a supply chain of over 200 suppliers. You and your team will be closely involved in managing and supporting the ongoing transition to the new supplier environment.”

Key Responsibilities:

▪ Proactively lead, manage and develop a team of contract managers, giving clear direction and support to maximise capability, quality and productivity. Ensure the appropriate level and number of staff are assigned to each eligible contract.
▪ Implement the strategic direction of HMRC contract management.
▪ Oversee production and delivery of contract management team plans, pipelines and actions for your category pillar
▪ IT to deliver effective contractual outcomes, including quality, value, delivery, innovation and continuous improvement agendas.
▪ Provide assurance that the policies, procedures, action plans and initiatives for Commercial Contract Management and Supplier Relationship Management are adhered to consistently across IT category pillar and business areas, working within the Supply Chain Assurance framework.
▪ Build and maintain key relationships across the business, promoting collaboration between business areas, and commercial teams.
▪ Ensure an effective risk management framework is in place to map, manage and mitigate supply chain risk for your category pillar.
▪ Support the delivery of a SRM programme for strategic suppliers within IT category driving additional value (service, cost and risk) beyond that originally contracted.

Key Criteria: To be successful, candidates will need to demonstrate capability against the following criteria:

▪ Has a strong delivery focus with the ability to operate successfully and deliver within a challenging and complex environment.
▪ Needs to be resilient – the transformation programme within IT and the structural changes in Commercial will provide challenges and opportunities.
▪ Extensive experience of managing strategic IT suppliers.
▪ Able to build and maintain effective customer and supplier relationships.
▪ Strong negotiator, with a drive to deliver value for money and achieve excellent service from our suppliers.
▪ Applicants must have achieved an A or a B* at a GCF Assessment and Development Centre (ADC) or be willing** to attend an ADC.

Applications are open until 16 April.

Once candidates have been "sifted", successful applicants will be invited to an assessment centre during the week commencing 7 May.

Final panel interviews will take place the following week.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

You Pay Peanuts You Get Monkeys

As loyal readers know, HMRC is doing away with its Aspire contract in favour of shorter contracts with a wider range of suppliers.

In order to ensure a smooth transition from the contract, HMRC has set up a new government-owned company called Revenue and Customs Digital Technology Service (RCDTS). Its purpose is to directly employ private sector contractors who had been working for Capgemini.

However, there is a fly in the oinkment for those who switch from private to public; as there is an ongoing Treasury policy of limiting all annual payrises across the public sector to 1% until at least 2020.

This is ironic as Dearnley told PAC this week that the new company had been set up specifically to provide "a better employment offer for the staff coming in from the private sector", including better base pay and pensions than could be expected as direct employees of HMRC.

However, he is quoted by Public Technology:

"It is limited by the pay cap.

But it does have a different salary scale and remuneration structure, so in that, we've been able to put together what we believe is a much more appropriate offer for people coming in from the private sector."

Adding:

"I'm sure this will be an ongoing topic of conversation with the Treasury over the next few years."

In other words this deal hasn't been agreed/signed off by the Treasury!

Seemingly more than a quarter of the private contractors, eligible for transfer into the civil service, have chosen not to do so.

"This was them making a personal choice that they either wanted a career somewhere else or they found a different job with a current employer, or it was their moment to retire or go off to do something different. 

That level of attrition that we saw was actually lower than we expected – but in line with the industry standard."

Maybe the civil service and the government needs to rethink how it rewards and retains people?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance




HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's £10BN Divorce From Aspire

As part of its bold new digital vision, HMRC has finally reached an agreement with its major IT suppliers (Capgemini and Fujitsu) HMRC on the phased exit from its £10BN Aspire IT contract (set to end in 2017).

Having disengaged from this monolith, it will move to a mixture of existing and new suppliers including SMEs for smaller-scale work packages in the run up to the complete rollout of digital tax accounts.

HMRC will use more flexible contracts. HMRC claims that it will save around 24% (£200m) a year by 2020-21 on the provision of like-for-like IT services, against a £854m total IT spend in 2014-15.

Lin Homer is quoted by CCH Daily:

"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."

Well then, let's see how this all works out!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's £20M IT Tender

HMRC recently launched a £20M tender for consulting firms to guide its IT department.

HMRC wants increased control over projects, as well as increased competition lowering profit-making. The current contract with Capgemini ends in 2017 and, theoretically, HMRC wants the new changes up and running by then.

Currently Capgemini co-ordinates HMRC's main sub-contractors Fujitsu and Accenture. However, aside from issues highlighted by a 2014 National Audit Office report, recent benchmarking studies also show that of the around £10BN (yes you did read the figure correctly!) the project is expected to cost by 2017, Capgemini will be making 16% profit (ie £1.2BN).

FACTOID: The original profit projection was a "mere" £0.5BN!

Under the new procurement system, HMRC will seek to have its IT systems managed by up to 400 IT subcontract suppliers, with no contract worth more than £100M.

However, as Consultancy UK notes, not everyone believes however that bringing in a large number of small players will improve the quality of service or lower operating costs. Mark Dearnley, HMRC's Chief Information and Digital Officer, says that getting rid of Aspire for a new system could itself cost up to £600M.

Additionally, the government’s Chief Commercial Officer Bill Crothers warns that if wide-ranging changes are to be made then planning needs to start early:

“This is enormous, risky and important, and that should guide what we do. Sitting behind this is getting better capability, being a better client and doing things in a phased way as much as possible...we should not be complacent.”

When has a government department ever fucked up an IT project?

Oh, hang on......

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's Private Digital Company

HMRC is apparently on the cusp of creating a new organisation which will take over responsibility for IT work previously outsourced to private companies (ie that work currently denoted as Aspire)

According to Government Computing, from November 2015, developments around case management, Customs and International as well as third-party supplier contracts may be delivered by what some have described as an "HMRC digital company".

The organisation is understood to be a limited company wholly owned by HMRC.

HMRC is also expected to announce that Capgemini will be providing 'test and release' services until 2020 during the digital transformation process. It is understood that up to 250 Capgemini jobs may be transferring to the new company.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Aspires To Havoc

As loyal readers know, HMRC's Aspire contract is regularly given a sound and well deserved kicking by various organs (eg NAO).

This time it falls to PAC to kick the bloated corpse that is Aspire.

The Public Accounts Committee (PAC) has warned that HMRC faces an “enormous challenge” in adapting its IT services contract, a change that could cause “havoc” to public finances.

New contract rules set out by the Cabinet Office will require HMRC to move to a short-term contracting model.

Richard Bacon, PAC member and Conservative MP for South Norfolk, is quoted by economia:

“HMRC faces an enormous challenge in moving to a new contracting model by 2017, with many short-duration contracts with multiple suppliers, and appears complacent given the scale of the transformation required. 

Moreover, HMRC’s record in managing IT contractors gives us little confidence that HMRC can successfully achieve this transition or that it can manage the proposed model effectively to maximise value for money.” 

He added that HMRC appeared “overly complacent” given the scale of the required transformation.

“Failure to collect taxes efficiently would create havoc with the public finances.”

PAC recommended that HMRC develops and produces a realistic plan as to how it would – along with the Cabinet Office – implement the transition.

HMRC are not worried. An HMRC spokesperson said:

“We are making significant progress in preparing for a smooth and effective transition from the Aspire contract, which will give HMRC control over the development and delivery of digital services and enable us to make efficiencies of up to 25 per cent by 2021. 

We have already opened one new HMRC digital delivery centre in Newcastle, and have plans for others to increase our in-house digital capability, and in December we agreed an amendment to Aspire which allows us to contract services directly with major IT suppliers.”

No worries then!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Aspire For Chaos

The Times today warns that HMRC's Aspire contract, the country’s biggest IT contract, is heading for disaster under coalition plans to split it into 100 parts, putting billions of pounds of taxpayers’ money at risk.

Leading industry specialists have told The Times that splintering the £10 billion Aspire contract, which holds the tax records of 50 million Britons, will end in chaos, with higher costs and a substantial risk to the economy.

Methinks that the Aspire contract is already a lost cause, in terms of cost overruns; will splitting it into smaller parts really make things worse than they already are?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's £10BN Aspire Contract - Unacceptably Poor

As loyal readers know, I have on occasions written about HMRC's Aspire contract; eg in August 2013 I wrote:

"HMRC has spent over £3.7BN with Capgemini over the last five years on the Aspire contract. The contract was originally valued at £2.8BN.

As per Computing the spend was:

-2008/09:  £777.1m
-2009/10:  £728.9m
-2010/11:  £757.8m
-2011/12:  £735.5m
-2012/13:  £773.5m

HMRC won't reveal a more detailed breakdown of its costs:

"It is considered that disclosure of details about cost breakdown of payments made by HMRC to Capgemini would prejudice the commercial interests of HMRC as a contracting authority and our ability to deliver best value.
It is also considered that release of such information would weaken our supplier's position in a competitive environment by revealing market-sensitive information or information of potential usefulness to its competitors."

Does this spend represent value for money?"

Fast forward almost a year, and we see Aspire in the headlines yet again.

The National Audit Office (NAO) says, in a report entitled Managing and Replacing The Aspire Contract, that the Aspire contract cost £7.9BN between July 2004 and March 2014, and estimates that, by the time it ends in June 2017, HMRC will have spent £10.4BN.

Note that the original contract was valued at £2.8BN.

How on earth has the spend so skyrocketed out of control?

Very simple, additional projects and services have been added. Unfortunately these have not been market tested; ie HMRC has happily allowed the new work to be done by Capgemini without checking to see if it could be done better or more cheaply by others.

"Both Capgemini and its subcontractor, Fujitsu, have achieved considerably more profit than was modelled in 2004. "

Well done lads!

The NAO report also notes that HMRC was overly dependent on the technical capability of the Aspire suppliers between 2004 and 2012, which limited its ability to manage the contract commercially.

The NAO states:

"There are serious risks to HMRC’s business if the programme to replace the Aspire contract fails to meet its objectives by June 2017, when the contract ends."

Amyas Morse, NAO head, said:

"HMRC faced complex, long term technology challenges, and Aspire provided an appropriate means of working through them and limiting risk. However, there has been a lack of rigour in HMRC's commercial management of the contract. 

It is essential in any contract that the client retains the independent expertise to challenge the supplier. We welcome HMRC’s recognition of this part way through the Aspire contract and its efforts now to rebuild its capability. 

HMRC now faces a considerable challenge in a limited amount of time to negotiate reform to the contract while at the same time defining its technology strategy for post-Aspire."

Margaret Hodge, chair of the Public Accounts Committee (PAC) described HMRC’s management of Aspire as ‘unacceptably poor’.

Quite so!

She went on to say:

"Its own lack of capability meant HMRC was over-reliant on providers’ technical expertise, undermining its ability to act as an intelligent customer on behalf of the taxpayer. All of this gives me little confidence that HMRC’s senior team has the capability to manage large and complex contracts."

I agree, as I have noted many times before government departments do not manage large IT projects well.

This is indeed UNACCEPTABLY POOR!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Mark Hall Warns of The Tail Wagging The Dog

In August Mark Hall, HMRC's outgoing Chief Information Officer (CIO) gave his incoming replacement (Mark Dearnley) some advice about the major challenges facing HMRC for when he arrives in October from Vodafone.

Was that the last that we would hear from Hall?

Apparently not, this week he has been speaking at Gartner’s Outsourcing & Strategic Partnerships Summit in London, where he offered some sage (a little IT pun there..very little) advice to HMRC and its Aspire contractors (mainly Capgemini).

Aspire (which costs £700M per annum) was set up in 2004, with prime contractor Capgemini delivering much of HMRC’s IT services via an ecosystem of suppliers that include BT, Fujitsu, and Level 3. The contract is due for renewal in 2017, and is currently being restructured.

Hall described it as a "child of its time", hardly a ringing endorsement, and warned of supplier dependency wherein the supplier (Capgemini) is the integrator of what HMRC does (a case of the tail wagging the dog)

He noted that suppliers are now offering "vanilla" services (ie basic services), and noted that most of the innovation is coming from SMEs and start-up businesses. Seemingly large suppliers are “tied up in knots” and they are still selling IT in verticals. Hall is of the view that working with SMEs, that have innovative products and ideas, would be beneficial.

Hall is quoted by Computer World UK:

“Our outsourcing partners have been there when we have needed them, they’ve been with us in the good times and they have been with us in the tough times. That’s a lot of what the contract was designed for in the early 2000s. The challenge is that the whole world is moving and changing around this contract.

It is really difficult to keep pace with the market. Go back to 2001, how many people would have put cloud-based services in their contracts at that point? How many people would have thought about the social networking aspect? You wouldn’t. The contract was designed to be flexible, but was designed in a completely different paradigm than we face today.

It’s also created supplier dependency – we’ve got a great partner (Capgemini), but our challenge is that our partner is the prime integrator of what we do, so a lot of the knowledge and a lot of the experience rests with the supplier. It’s a challenge about how you bring innovation into delivery.

What we have done is a lot of outsourcing-based work, but the challenge is how to bring innovation, and if I’m being slightly blunt, innovation from SIs and large vendors that are trying to sell us the vanilla type IT.

Most innovation is coming from start-ups and SMEs, it’s not coming from the large traditional vendors. So there’s a challenge about how you get those people into a large outsourcing arrangement. We recently ran an event where we brought in 12 small businesses and ran an innovation session with them for a day, and we are now taking all those 12 forward in terms of ideas they are developing.

But it’s taking that radical thought to really put those people in. If you are a small business of 10 people with a really great idea, imagine coming into an organisation like HMRC that start to talk to you about risk, challenges, availability – it all becomes quite difficult. So we are doing a lot of incubator work to try and help those businesses.”

In other words HMRC's IT future, if it wishes to succeed, lies with SME's not large suppliers.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Spends £3.7BN With Capgemini

HMRC has spent over £3.7BN with Capgemini over the last five years on the Aspire contract. The contract was originally valued at £2.8BN.

As per Computing the spend was:

-2008/09:  £777.1m
-2009/10:  £728.9m
-2010/11:  £757.8m
-2011/12:  £735.5m
-2012/13:  £773.5m

HMRC won't reveal a more detailed breakdown of its costs:

"It is considered that disclosure of details about cost breakdown of payments made by HMRC to Capgemini would prejudice the commercial interests of HMRC as a contracting authority and our ability to deliver best value.

It is also considered that release of such information would weaken our supplier's position in a competitive environment by revealing market-sensitive information or information of potential usefulness to its competitors."

Does this spend represent value for money?


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Moves To Siam

It seems that HMRC is rethinking its approach to IT, or rather more specifically its approach to outsourcing its IT development. Computer Weekly reports that HMRC intends to double the number of its software developers to 600, in a bid to reduce its reliance on companies such as Capgemini and its existing Aspire contract.

The plan is to increase the number of its in-house software development team by 300 over the next 3 years, as the Aspire contract expires in 2017.

Mark Hall, HMRC's CIO, said that HMRC will not renew the Aspire contract in its current form. That's remarkably open of him, given that HMRC claim that they do not like disclosing contractual details lest it disadvantage them:

"...disclosure of commercially sensitive information could undermine the commercial interests of both parties and potentially the efficacy of the agreement we have with our contracted supplier."

Anyhoo, Hall is quoted:

“My piece is to work toward 2017 and how to build capability internally around commercial, business analysis, digital capability and adopting agile methodologies.
We are looking at the role of the in-house team. Currently we have around 300 people working as software developers, we are looking to double that over the next three years and build an ecosystem of SMEs around them.”

An "ecosystem of SME's"...hmmm, what does that mean?

He then went on to talk about a "slide path":

“This isn’t about looking to in-source everything, but moving to a more mixed environment

We don’t want a big procurement, and we are trying to create a slide path toward internal capability.”

Hall says that the future of HMRC lies in Siam (system integration and management model), either HMRC itself would take it on or it would use a supplier to do it.

There is of course a fly in HMRC's oinkment, suppliers are reluctant to take on Siam in government because they view it as the most risky and least lucrative option.

The plans of mice, men and HMRC!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Rank Hypocrisy

My thanks to a loyal reader who pointed us to a rather interesting article in Private Eye, that exposes the hypocrisy of the government/PAC wrt tax avoidance practised by multinationals.

On the one hand the government/PAC lambastes these companies for not paying "enough" tax, yet on the other hand the government pays them vast sums of taxpayer money for government contracts.

As per Private Eye:

"Across the board the position is clear enough. The companies to which British taxpayers hand over billions every year for questionable IT services are paying peanuts to the government in tax on their ample profits."

Included within Private Eye's list of companies are the Aspire consortium (paid approximately £800M per annum by HMRC).

Within the consortium Fujitsu (which is paid by HMRC to run its ICT) paid £10M tax on its profits over the last four years on turnover of £9BN, and Capgemini, which doesn’t disclose details of actual payments, shows tax credits in recent years, indicating no tax payments at all. Their absence is accounted for by profit margins way below the group’s worldwide performance, and tax relief for pensions costs and research spending.

Tax avoidance is perfectly legal. However, it is hypocritical of the government/PAC to lambaste companies for practising it yet at the same time rewarding them with taxpayers' money for government contracts.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Everything Is Wunderbar!

My compliments to Phil Pavitt (Chief Information Officer of HMRC), who is now rather ubiquitous in the media and is currently outshining Lin Homer in the "column inches" devoted to his achievements.

Recently I noted that Pavitt was proudly claiming that he/HMRC had halved HMRC's spending on IT from £1.4BN to £700M in two years. I was "shocked and appalled" by the reactions from some of the cynics within my loyal readership, who suggested that Pavitt may be telling porkies:

"Those of us who have followed the, erm, spotty career of Phil "Employment Agency " Pavitt will understand that his relationship with the truth has always been somewhat difficult..........."


"One suspects most of the 'gains' have come from consolidating software onto fewer physical boxes and using more 'virtualisation' as this is the flavour of the month in IT at the moment. However, the fact you are running a virtualised Windows server on a machine that is also running a virtualised Unix Server etc does not mean you have any less operating systems or software to support just less hardware.

So Pavitt's claim to have only one platform is almost certainly being extremely economical with the truth Since much of the cost is taken up by the former not the latter I doubt that these 'savings' are going to be around for long as overtime software license increases will eat into the savings.

Virtualisation can create its one issues as shared resources such as disk, memory and cpu capacity may have to upgraded over time if one of the systems using the resource has been poorly specified and is subsequently found to need much more grunt. For example, general upgrade of CPUs on shared machine can feed directly into the bottom line as licensing costs of software are often based on CPU Mips. Thus if you enhance the CPUs on a box because one system or application needs more processing speed then all the other systems software licenses may also be hiked regardless of whether they need the extra power or not. 

This is the ticking time bombs Pavitt is leaving for his successors."

Such cynicism has not deflected Pavitt from telling the world about another saving (I assume that this is on top of the £700M IT saving that he was talking about the other day?) that HMRC has made. Apparently, HMRC will save more than £200M by 2017 after renegotiating its Aspire outsourcing contract with Capgemini.

Aspire covers IT services including desktops, laptops and a number of tax and credit systems such as online VAT filing. The contract, which is led by Capgemini and includes some 360 other suppliers, was renegotiated in January.

It most certainly needed some renegotiation, for as I wrote in February 2012:

""The Aspire contract between HMRC and Capgemini covers a 13 year period and was originally valued at £2.8 billion.[49] This contract is a case study of what is wrong with the present procurement culture. Such a large contract is too complex to manage. The assessment of costs and benefits is opaque and it commits too much power and money to a single supplier."

Anyhoo, as well as lowering the cost per unit of IT services, the renegotiations will give HMRC greater control over the volume of work going through Aspire, according to the Cabinet Office. HMRC will also be able to control the Aspire subcontractors directly, which was previously the responsibility of Capgemini.

Pavitt is quoted by the Guardian:

"No longer do we have a unique SI relationship with Aspire and Capgemini.

We have introduced competition at all levels. There's no longer exclusivity between us and our partners."

HMRC is currently introducing 25,000 new PCs to its offices, and Pavitt claims that its IT service levels were at 99.93% "our best ever".

Pavitt said:

"We have cut our IT costs, transformed IT and made it sustainable, stabilised our services and reorganised our business processes. We have some way to go still, but we are delivering sustainable change."

So there you have it, everything is wunderbar!

There is no stopping this man!

However, I am always interested to hear from those of you who have to use the systems and have insight into the reality behind the claims made by Pavitt. Let us trust that he does not seek to emulate Icarus and fly to close to the sun.

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Aspire Renegotiated

In July 2011 I wrote the following:

"The Guardian reports that the government is paying up to 10 times more for IT projects than the standard commercial rate.

The public administration select committee (PASC) found ministers were "overly reliant" on a few large suppliers, resulting in the waste of an "obscene amount of public money".

Is HMRC being ripped off?

Well, judge for yourselves:

"The Aspire contract between HMRC and Capgemini covers a 13 year period and was originally valued at £2.8 billion.[49] This contract is a case study of what is wrong with the present procurement culture. Such a large contract is too complex to manage. The assessment of costs and benefits is opaque and it commits too much power and money to a single supplier."

Source Government and IT- "A Recipe For Rip-Offs": Time For A New Approach"

HMRC last month renegotiated Aspire (now worth around £8.5BN) with Capgemini, in line with the government's revised IT sourcing strategy.

My thanks to a loyal reader who pointed me to an article in Information Age, which notes that HMRC has agreed "operational efficiency and cost savings" with Capgemini. Additionally, work that is currently subcontracted to over 240 suppliers by Capgemini may (note that is only "may", not "will") be transferred to direct contracts with HMRC.

The last renegotiation of Aspire in 2009 aimed to save £110M per annum, by scrapping the legacy systems taken on board by the merger of the Revenue and Customs and Excise, and by shutting down a number of data centres.

Unfortunately, the renegotiated contract details are confidential.

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

The Humongous Turning Circle

Changing some of HMRC's strategies, policies and long term contracts with suppliers seems at times equivalent to trying to divert the course of a supertanker which has a humongous turning circle.

Computer Weekly recently reported that HMRC has started to reassess its £8BN IT contract with Capgemini.

Will we see immediate changes?

No, unfortunately not, because the contract does not expire until 2017 (three years after this particular government ends its current term of office).

HMRC CIO Phil Pavitt has submitted a proposal to the departmental board for reforming its IT outsourcing contract. He told Computer Weekly that a renewed deal would conform with government ICT strategy, up to a point. However, it would not open the door to any more SMEs than were already subcontracted to work for HMRC by Capgemini.

"You can sense the mood of the current strategy. I can't tell you what will happen. It will be more in line with government strategy today than perhaps this contract that was let seven years ago.

If you are asking if SMEs will have a higher value of the contract. Then yes I can assure that will be the case. Will the volume of SMEs go up, probably not."


The above also implies that HMRC's current contract was negotiated and signed with a happy disregard for the then government policy of the day.

That being said it seems that, despite the government's stated desire to place 25% of public expenditure with SMEs, reality is proving to be a strict and unyielding mistress. The Cabinet's Chief Procurement Officer, John Collington, subtly shifted the targets by vainly boasting that the volume of contracts awarded to SMEs had gone up from 5% to 44% between January and September 2011.

Volume of course is not the same as value!

The fact is that the government does not know how much business it does indirectly with SMEs, because the large suppliers (who hold the head contract with departments such as HMRC) will not reveal the data and indeed don't even bother collecting it.

It seems to me that the large suppliers have HMRC and the government by the gonads here.

Or am I being far too harsh on the suppliers?

As to whether HMRC, and other government departments, are actually able to negotiate future contracts that do not put them at the mercy of the large suppliers, cost the taxpayer dear and leave SME's out in the cold remains to be seen.


Whatever the outcome, 2017 is a hell of a long way off, and not every supertanker turns in time to avoid collision or running aground!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Obscene

The Guardian reports that the government is paying up to 10 times more for IT projects than the standard commercial rate.

The public administration select committee (PASC) found ministers were "overly reliant" on a few large suppliers, resulting in the waste of an "obscene amount of public money".

Is HMRC being ripped off?

Well, judge for yourselves:

"The Aspire contract between HMRC and Capgemini covers a 13 year period and was originally valued at £2.8 billion.[49] This contract is a case study of what is wrong with the present procurement culture. Such a large contract is too complex to manage. The assessment of costs and benefits is opaque and it commits too much power and money to a single supplier."

Source Government and IT- "A Recipe For Rip-Offs": Time For A New Approach

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Physician Heal Thyself

As we all know HMRC has had a few problems (eg cost overruns, project delays, technical glitches, data loss etc) wrt its Information and Communications Technology (ICT).

The Cabinet Orifice has recognised that one of the problems with ICT matters (Whitehall wide) is the exclusion of SMEs from government business and project meetings.

Therefore HMRC, at the behest of the Cabinet Orifice, has told Capgemini to include SMEs in project meetings in Whitehall (Capgemini subcontracts the HMRC £8.5BN Aspire contract to over 240 suppliers).

Another fundamental problem with large IT contracts, where SMEs are excluded from project meetings etc, is the danger of outsourcing firms inflating prices and suppressing innovation (ie ripping the taxpayer off).

Mark Hall, deputy CIO at HMRC, is quoted by Computer Weekly:

"We have started a new process called Tripartite.

Which is where we were always challenged, around getting everybody to the table.

So now when we have conversations, the prime contractor, ourselves and the SME delivering the goods are in the same conversation.

We are working around cost savings and working very closely and collaboratively with the cabinet office. This is not just about what we can negotiate, its about what UK government can negotiate."

HMRC are also looking to identify where its expenditure is delivering value.

Hall says:

"This is quite challenging for supply chains because it demands transparency."

Seemingly, on top of "Lean", the new word in HMRC's "management speak" is "Agile".

LOL!

Well good luck to them trying to improve the performance of their outsourced contractors.

However, some may be tempted to suggest that HMRC also needs to improve its own internal performance.

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Gone Phishing II

Earlier this month a loyal reader sent me a link to an article about a potential security flaw within the HMRC website, that may allow phishers to harvest personal information from the unwary user.

It transpires that there is another, similar, security flaw within the HMRC site. Concept Business System explain the issues here.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

IT Matters

As the online filing deadline of 31 January looms ever larger on the horizon, some taxpayers and their agents who file online are experiencing the traditional January technical hiccup in online services provided by HMRC.

Silicon.com reports that HMRC has received about 300 complaints from people who have been unable to view their tax information after logging into their HMRC account.

They report being unable to view their previous years' self-assessments and tax returns. This means that certain details, required for completion of this year's returns, need to be requested from HMRC in hard copy form.

All very well if the deadline was not quite so close. However, HMRC have stated that there will be delays in sending out hard copies because the tax offices (not unreasonably) are busy at this time of year.

HMRC are quoted:

"If anyone is unable to file on time because HMRC was unable to provide them with the information they need we would consider a claim that they had a reasonable excuse for not filing on time."

HMRC went on to state that it is working with Capgemini (its IT supplier) to fix the problems, which have been going on for a month.

Are there any other ongoing problems with the system? Feel free to share.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"