Income Tax Self Assessment Ecosystem Data and Integration - Innovation-Led Proof of Concept

This is NOT a call for competition or requests to participate.

This IS notice of a planned procurement.

His Majesty's Revenue and Customs (HMRC) intends to commence a competitive procurement for the delivery of an innovation-led Proof of Concept (PoC) exploring how emerging technologies, richer transaction data and integrations across banking, payment, fintech and software ecosystems could support increased simplification and accuracy within Income Tax Self Assessment (ITSA).

The PoC will build, test and evaluate a working technical demonstrator. Its purpose is to generate evidence and learning, rather than develop a live service or commit HMRC to a specific future solution.

This work supports HMRC's Transformation Roadmap and aligns with HMRC's Strategic Approach to Third Party Software. It explores how banking, payments, fintech and software ecosystems can help customers manage their tax affairs through the products and services they already use, reducing administrative effort, improving visibility of tax obligations and helping customers get their tax right first time, while building on a thriving and innovative market.

Making Tax Digital (MTD) for Income Tax provides the digital foundations for ITSA and continues to roll out. Innovation across banking, payments, fintech and software markets presents opportunities to develop, test and better understand ecosystem approaches to support more efficient and effective tax administration that makes it simpler for customers to meet their tax responsibilities.

For many ITSA customers, software and fintech products already provide valuable automation and support, helping many customers to manage their tax affairs more efficiently. However, richer data, improved standards and greater interoperability may create opportunities to further enhance transaction categorisation and apportionment, reducing customer effort, supporting customer experience and ensuring more accurate tax outcomes.

HMRC wants to test and learn with the market how banks, payment providers, fintechs and software platforms can build on existing capabilities to deliver more integrated, accurate and customer-centred tax experiences, while supporting a thriving and innovative software ecosystem.

The central question for the PoC is: to what extent can future enhanced data, ecosystem integrations, and interventions reduce customer effort, improve customer experience and improve accuracy across more aspects of Income Tax Self Assessment?

HMRC welcomes ideas from suppliers which innovate further, building on today, and looking towards future capabilities. Suppliers are welcome to bid independently or in partnership to build, test and evaluate an end-to-end working technical demonstrator of enhanced future capabilities and integrations. Alongside SMEs, HMRC anticipates that this procurement will be suitable for participation by consortia involving banks, payment providers, fintechs and accounting software providers.

The following services are indicative and non-exhaustive:

• provision of a sandbox or test environment;
• creation and management of HMRC defined, persona-based synthetic transaction datasets, with sufficient complexity, realism and scale to fully test the technical demonstrator;
• design, build and operation of a realistic working technical demonstrator showing how future ecosystem data and integrations could impact on transactions, including categorisation, apportionment, or establishment of gross and net income positions;
• testing against agreed evaluation measures, including transaction treatment accuracy, tax calculation accuracy, and customer effort; and
• evaluation of findings, lessons learned, and recommendations for potential future application.

Through the procurement HMRC may seek information relating to:

• ecosystem data sources and standards available to suppliers;
• accessibility, availability and interoperability of those data sources across accounting software providers and other ecosystem participants;
• applicability of data sources and integrations across the ITSA population;
• commercial, operational or legal factors affecting ecosystem sharing and interoperability;
• the strengths and limitations of current and emerging approaches.

Through the PoC HMRC aims to:

• generate evidence on the value of enriched ecosystem data, integrations and emerging technologies; and
• evaluate how emerging banking, payments, fintech and software capabilities can work together to support an accurate and efficient ITSA.