HMRC offshoring is 'not on the table'

Wednesday, August 05, 2009

HM Revenue and Customs (HMRC) has flatly denied reports that it is considering offshoring tax administration work to India to save money.

According to Computer Weekly, it has obtained a couple of documents that suggest the department is considering offshoring.

An internal Restricted document revealed that HMRC is considering ways to save money in light of future budgetary restrictions as part of a Project Quantum. Quantum's aim is to cut the costs of the Aspire deal by around £205m a year. The Aspire deal is worth £8.5bn and is one of the government's largest outsourcing deals. Largely because of extra work, the cost of the Aspire contract with Capgemini has more than doubled since HMRC signed it in 2004. The document is reported to say that savings of £205m a year will be a "challenge", but does not suggest offshoring as a solution.

But a second document, a memo from the Public and Commercial Services union (PCS) to HMRC staff, said another of Project Quantum's aims was to consider the viability of potentially offshoring some future work. PCS also expressed concern over any large changes in the future, with both the Conservatives and Labour warning of budgetary instability in years to come.

The controversy behind the offshoring rumour is due to current government policy that says tax records only go overseas in an emergency, for fault-fixing purposes. The government has always refused the general sharing of tax records abroad as it would be difficult to control access to the data and its security.

But a spokesman for HMRC told Public Servant Daily that the idea of offshoring tax records is "simply not on the table" and HMRC would never allow records to go overseas.

"The contract does not permit IT services to be delivered from outside of the UK and we currently have no plans to change this. Data security is always of paramount importance to HMRC and we would in no way compromise this," he said.

But he did admit that Quantum was in place to look at how HMRC can provide better value for money to the taxpayer.