Capgemini wins £37M HMRC contract to migrate tax system to SAP S/4HANA

HMRC has awarded Capgemini a £37 million contract to handle one of its most critical system migrations: moving the Enterprise Tax Management Platform from SAP ECC 6.0 to S/4HANA. ETMP supports 40,000 users and processes more than £800 billion in tax revenue and payments annually. The contract runs until 2032, which would bring Capgemini's continuous involvement with HMRC's tax systems to 28 years since first becoming lead supplier in 2004. Capgemini will work with Invenio to support the migration onto SAP's UK Sovereign Cloud.

The procurement process has drawn attention because of the long-standing relationship between HMRC and Capgemini. HMRC officials said there were several bidders from the DALAS framework, including Accenture, Atos, CGI, Cognizant, and IBM, and that ethical wall arrangements and non-disclosure agreements were put in place to prevent commercially sensitive information from flowing to bidders already working with HMRC. HMRC has previously denied that its later ETMP contracts with Capgemini were extensions of the Aspire contract, which formally ended in 2017 with some services continuing until 2020.

The broader context raises ongoing concerns about value and leverage in government IT contracts. The National Audit Office found that the Aspire contract cost £10.4 billion against a £4.1 billion bid estimate, with Capgemini and Fujitsu earning £1.2 billion in combined profit at a 15.8 percent margin. A parliamentary committee accused suppliers of outmaneuvering HMRC at key points. Research by The Register and Tussell found that HMRC had awarded £3.8 billion in contracts since 2020 to technology suppliers previously involved in Aspire.

Separately, HMRC awarded SAP a £275 million contract for S/4HANA in January without competition, stating that SAP was the only supplier with sovereign capability. Capgemini also became an SAP Sovereign Cloud Partner for the UK in June. These overlapping contracts, SAP providing the platform, Capgemini handling the migration, mean HMRC is committing substantial spending across multiple long-term agreements with limited competitive pressure at the platform layer.