HM Revenue & Customs (HMRC) has announced plans to overhaul its core tax and revenue systems, migrating from an on-premise enterprise resource planning system to SAP's cloud-based S/4Hana platform. This modernisation, delivered through SAP's Rise programme, is intended to enhance operational efficiency, provide real-time analysis, and improve services for taxpayers.
The new system is scheduled to go live in 2029, underpinning the department's efforts to future-proof its tax management infrastructure and better align with broader government objectives for digital transformation and artificial intelligence.
Overview of HMRC’s Digital Transformation
HMRC is embarking on a significant digital shift by selecting SAP S/4Hana Cloud as the foundation of its Enterprise Tax Management Platform (ETMP). The move represents a departure from legacy on-premise systems, addressing the need for scalability and agility in public sector technology.
By deploying cloud systems, HMRC aims to streamline operations and provide improved services over the next decade. According to HMRC, this decision forms part of a long-term strategy to modernise how taxes are managed.
The change is also driven by SAP’s planned discontinuation of support for ECC 6.0 in 2027, necessitating a robust transition to a supported platform.
Transition from On-Premise to Cloud
The department's ETMP has been underpinned by SAP technology since 2004, previously operating on SAP ECC 6.0. In 2023, HMRC launched the ETMP Regeneration Programme, which recommended migration to S/4Hana after successful pilot work.
Formal approval was secured in January 2025, with the department now engaging SAP's Rise platform to aid the transformation. SAP's Rise programme, which began in 2021, offers a 'business transformation-as-a-service' approach. It seeks to migrate large organisations to its latest ERP systems and has attracted major clients across sectors.
Strategic Role of Enterprise Tax Management Platform
The ETMP serves as the technological backbone for HMRC's management of tax accounting and payment processes. Supporting over 45 tax regimes and handling in excess of £800 billion in revenue annually, the platform is used daily by tens of thousands of HMRC staff.
Modernisation will help ensure the platform remains resilient and capable of adapting to evolving public and government expectations in digital service delivery.
Integration of Artificial Intelligence and Security
A key component of the upgrade is the integration of artificial intelligence (AI) to automate and enhance tax administration. HMRC expects that enhanced AI functionality within the SAP S/4Hana environment will enable faster data analysis, more efficient process automation, and improved decision-making across critical operations.
The system will be deployed on SAP's UK sovereign cloud, providing a locally hosted solution designed to meet strict data residency and security requirements. SAP has stated that this infrastructure lays the groundwork for future innovation and strengthens the overall resilience of the country's digital tax framework.
Additional Technology Investments
Alongside the S/4Hana cloud migration, HMRC is seeking to further enhance its digital capabilities through significant new tenders. In April 2025, the department initiated procurement processes for a new customer relationship management (CRM) system, with a contract value up to £1 billion and an anticipated service period from February 2026 to February 2036.
Additionally, HMRC is procuring a contact centre-as-a-service provider, valued at approximately £500 million. These new systems are intended to interoperate with the wider HMRC IT estate, supporting more efficient and effective digital services for individuals and businesses.
Final Summary
HMRC's commitment to adopting SAP S/4Hana Cloud signals a significant milestone in the UK's public sector digital transformation journey. The migration from legacy on-premise technology to a cloud-first, AI-enabled environment is expected to deliver improved efficiency, data capability, and resilience to the tax authority's core systems.
Planned additional investments in CRM and contact centre services further demonstrate HMRC's focus on enhancing both staff productivity and taxpayer experiences.
This comprehensive technological evolution reflects broader government ambitions for secure, innovative public services. For those seeking insight into digital strategy developments in the tax sector, Pie offers regular updates and expert analysis.
