£37M SAP overhaul could extend Capgemini's run with UK tax collector to 28 years

The UK's tax collector has awarded Capgemini a £37 million contract to help migrate a critical tax system from SAP's legacy ECC platform to S/4HANA, extending a supplier relationship that began in 2004. HM Revenue & Customs (HMRC) has hired the French IT services company to move the Enterprise Tax Management Platform (ETMP) from SAP ECC 6.0 to its successor, S/4HANA, a completely re-engineered application platform. The system provides 40,000 users with returns processing, tax accounting, payments, and data management capabilities, and handles more than £800 billion in tax revenue and payments annually. The contract runs until 2032, potentially extending Capgemini's involvement with HMRC's tax systems to 28 years. Capgemini became HMRC's lead technology supplier in 2004 under the Aspire contract, with Fujitsu and Accenture serving as subcontractors. In 2014, the National Audit Office (NAO) said HMRC was set to spend £10.4 billion on the contract, compared to the £4.1 billion estimate used to evaluate Capgemini's bid. In 2022, Capgemini won a £51 million, three-year contract to provide run and change services for ETMP and Enterprise Operations (EOPS). In 2024, the French supplier again won the contract to provide run and change services for ETMP and EOPS. The five-year agreement, which runs until June 2029, is valued at between £403 million and £574 million. HMRC has previously denied that its later ETMP contracts with Capgemini were extensions of Aspire, which formally ended in 2017, although some services continued until 2020. Separately, Capgemini won a Contact Centre as a Service contract worth up to £600 million over ten years. The Register understands there were several bidders for the new ETMP migration deal, but HMRC officials argued the details were commercially sensitive. They said HMRC took steps to ensure a fair and transparent procurement and a level playing field for all bidders. The competitors came from Lot 3 of the Digital & Legacy Application Services (DALAS) framework, which lists Accenture, Atos, Capgemini, CGI, Cognizant, and IBM as suppliers. Ethical wall arrangements and non-disclosure agreements were put in place to prevent commercially sensitive information from being shared with bidders already working for HMRC through other contracts, officials said. In January, HMRC awarded SAP a £275 million contract for S/4HANA without competition, saying in the award notice that the German software giant was the "only supplier with sovereign capability." In June, Capgemini said it had become an SAP Sovereign Cloud Partner for the UK. Andy Allen, a relationship director at Capgemini, later said the company would work with Invenio to support ETMP's migration to S/4HANA on SAP's UK Sovereign Cloud. "It's a complex and important programme, helping to ensure continuity, resilience and a platform fit for the future," he said. A Capgemini case study published in 2012 (now removed but archived here) said that ETMP was one of the projects it ran under Aspire. It also migrated Stamp Duty Land Tax onto the system. In 2014, the NAO said [PDF] Aspire had delivered improvements fundamental to HMRC's administration of tax, but found that the department had not evaluated the contract's overall strengths and weaknesses. The watchdog estimated that HMRC would spend £10.4 billion over the contract's lifetime, compared with the £4.1 billion figure used to assess Capgemini's bid. It said Capgemini and Fujitsu had earned considerably more profit than initially modeled, while pressure to cut costs had led HMRC to surrender some negotiating power. A parliamentary committee subsequently accused suppliers of outmaneuvering HMRC at key points. It said [PDF] Aspire cost £7.9 billion between July 2004 and March 2014 and generated £1.2 billion in combined profit for Capgemini and Fujitsu, equivalent to a margin of 15.8 percent. In January 2025, research by The Register and public sector spending specialist Tussell found that HMRC had awarded £3.8 billion in contracts since 2020 to technology suppliers previously involved in Aspire. At the time, an HMRC spokesperson told The Register: "We follow government procurement rules when awarding contracts and look for solutions that will improve services and get the best deals for taxpayers. For transparency, we publish contract awards along with contract variations."