Annual accounts reveal that last year the department stopped, paused, or consolidated more than 100 transformation projects, while reducing the ambition of others 

A project to share data with other departments and create a service to “deliver cross-government needs” was axed by HM Revenue and Customs last year as part of a programme of reducing or pausing its transformation work.

The department’s annual accounts reveal that 31 projects in its transformation portfolio were stopped or paused during 2017/18 following a preliminary scoping review. A further eight were halted after a prioritisation exercise,  which also led to 70 being consolidated with other programmes of work. Many more still were reduced in scope or ambition, or will now take place over a longer time frame than originally intended.

The primary driver for this shifting of priorities is the demands being placed on the department by the preparations for the UK’s impending exit from the EU.

HMRC began 2017/18 with a total of 267 projects, and a further 81 were added over the 12-month period as a result of Brexit, additional transformation objectives, or new fiscal events. In addition to those projects that were stopped, paused, or consolidated, the department also successfully completed 111 projects during the year. All of which means that it entered 2018/19 with a total of 128 transformation projects on its plate – 139 fewer than the preceding year.

Among the work to be stopped entirely in 2017/18 was the Data Platform project, the purpose of which was “to enable HMRC to share data with government bodies and set up a new service to deliver cross-government needs as envisaged in the Digital Economy Act”.

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The Digital Platform project to “carry out digital research and development” in areas including robotics has also been canned.

Securing Our Technical Future, a project in which the department is examining the “the scope for moving to secure cloud-based computing and rationalising existing IT infrastructure” is, according to the accounts, “being reconsidered”.

An online service for tax credits claims has been stopped, and plans to provide new digital services for Child Benefit claimants have also been shelved until further notice. Digitisation work related “smaller customer groups” – including those using Tax Advantaged Venture Capital Schemes and Inheritance Tax services – has been paused.

HMRC’s flagship Making Tax Digital project – which is split into two strands: one for individuals; and another for businesses – is going ahead, albeit with some alterations.

Work to implement “simple assessment and in-year tax code changes” for citizens has been paused, while work on the Online Personal Tax account will devote resources primarily to improvements of existing services, rather than new offerings – although these may still be created in cases “where they reduce post and phone contact or deliver significant savings”.

In the business strand of Making Tax Digital, there will be a slowing down of work to digitise reporting of excise, environmental, insurance, and transport taxes – except where this work is related to Brexit. The process of converging business taxes from multiple IT systems into a single environment has also been slowed. 

One project that has seen its resources increased, rather than cut, is the work to implement the Customs Declaration Service (CDS). Upon exiting the EU, HMRC’s customs system will need to be able handle almost five times as many declarations each year than the 55 million the current platform is required to – and about 100 million more than the maximum capacity originally intended for CDS when work on its rollout began before the Brexit referendum.

To help cope with the massive increase in the project’s requirements, a number of HMRC employees have been moved from other projects to work on the customs transformation scheme.

In his foreword to the accounts, HMRC chief executive Jon Thompson claimed that, despite the changes to the transformation portfolio, the department has made significant progress in developing online services and becoming “a data-led organisation”. He pointed to the fact that about 15 million people have now accessed their online personal tax account, while 93% filed their most recent annual self-assessment form digitally.

Thompson said: “Our investment in digital and making better use of the data we hold means people can do their tax or benefits when they want, where they want, using smart online systems that help to reduce error and fraud. Our modernisation programme goes further than this — developing our new customs system, our work to make it easier for businesses and agents to interact with us online, and our new network of modern, high-tech regional centres.”