HMRC has neglected IT modernisation


A report published by the Public Accounts Committee has criticised HMRC’s inability to modernise its IT infrastructure, concluding that the tax body has “spent too much of its IT budget on patching up legacy systems rather than modernising them”.

A de-prioritisation of modernisation initiatives has left the body saddled with technical debt, with the report noting how “data and technology infrastructures had not kept pace with developments since they were put in place in the mid-1990s”. The continued reliance of public sector bodies on legacy IT should be a cause for concern, especially given the current circumstances and the need to process and manage reliable data.

The Covid-19 pandemic has starkly illustrated public services’ urgent requirement for accurate, accessible data. However, public bodies including HMRC, as this new report proves, continue to be reliant on outdated legacy systems, emphasising a ‘keeping the lights on’ approach at the expense of modernisation initiatives and the increased benefits they can bring. A modernisation program needs to look at rationalisation too. The reason why organisations find themselves in this state is due to the layer upon layer of technical debt that accumulates over time through “projects” that continually add and not remove this debt. The complexity of middleware and integration is crippling the pace by which organisations can move, coupled with the fact they all need to be patched and managed to mitigate security risks.

HMRC runs on the efficiency of information, and on this information being up-to-date. If, as the report notes, some of the data and technology infrastructures have been unable to keep up with the pace of change, then that is a serious concern, especially in the current circumstances where data needs to be constantly managed and accessible to best serve the public.

Digital transformation is a delicate process, but if HMRC can efficiently modernise their data practices in the coming months, they will be able to put a framework in place to become a digitally native tax administration.