HMRC, the UK’s tax authority, is partnering with SAP to upgrade its core revenue systems. They want to put artificial intelligence at the heart of their strategy. Instead of just adding AI tools on top of old systems, HMRC is rebuilding its technology from the ground up. This move aims to create a more modern, efficient, and secure tax system that can handle future demands.

Transforming HMRC’s Tax Infrastructure

The main focus is on upgrading the Enterprise Tax Management Platform (ETMP), which handles over £800 billion in tax revenue each year. This system supports more than 45 different tax regimes. By moving this infrastructure to a cloud environment through SAP’s RISE platform, HMRC hopes to simplify a complex technology setup used by thousands of staff daily.

One of the key benefits of this change is better data management. Legacy systems often store data in fragmented ways, making machine learning and automated decisions difficult. With a unified platform, HMRC can enable faster insights and automate processes more effectively. They will also implement SAP’s Business Technology Platform and AI tools to support these goals.

Ensuring Security with Local Cloud Hosting

Using AI in government agencies requires strict data governance. To meet these needs, HMRC will host its new AI capabilities on SAP’s UK Sovereign Cloud. This ensures that data stays within the UK and adheres to local security and compliance rules. It allows HMRC to benefit from commercial AI tools while maintaining control over sensitive information.

According to Leila Romane, SAP’s UKI Managing Director, hosting on a UK sovereign cloud boosts the resilience, security, and sustainability of vital national systems. This approach helps ensure that large-scale public services like HMRC’s can operate reliably, even as their needs evolve.

Improving Taxpayer Experience Through AI

The ultimate goal of these upgrades is to make life easier for taxpayers. HMRC and SAP are working together to develop new AI features that improve how taxpayers interact with the system and how decisions are made. Better data access and improved interfaces mean employees can provide faster, more accurate support, and taxpayers benefit from more transparent processes.

This project highlights that adopting AI is not just about software. It’s about building the right infrastructure first. Securing a sovereign cloud foundation helps HMRC scale automation safely and effectively. For leaders in other sectors, this shows the importance of addressing technical debt and data sovereignty to unlock the full potential of AI in regulated environments.

Overall, HMRC’s modernisation effort demonstrates how cloud and AI can transform public sector services, making them more efficient, secure, and responsive to the needs of citizens.

Inspired by

• https://www.artificialintelligence-news.com/news/how-sap-modernising-hmrc-tax-infrastructure-with-ai/

Sources

• sap.com