UK tax infrastructure faces modernization and reform efforts

The UK government is seeking to modernize its tax infrastructure, with HM Revenue & Customs (HMRC) inviting suppliers to bid for a contract worth up to £500 million to revamp the National Insurance and PAYE System (NPS). The current system relies on legacy technology with limited scalability. The proposed seven-year contract aims to transition the NPS toward a more agile, service-oriented architecture capable of real-time processing and responding to evolving policy and technological needs.

Separately, policy analysis from IPPR suggests that the British tax system requires significant reform to meet rising public demands and fiscal pressures. The report notes that the UK faces a growing gap between the revenue required for an aging population, defense needs, and climate transition, and the current capacity of the tax system. IPPR identifies political, public, and press-related pathologies that have historically hindered major tax reforms in the country.