HMRC chooses cloud SAP S/4Hana for tax system overhaul

HM Revenue & Customs (HMRC) has chosen SAP S/4Hana in the cloud, using the supplier’s Rise pathway, for an overhaul of its core tax and revenue systems.

The UK government department is moving from an SAP on-premise enterprise resource planning (ERP) system to the supplier’s more recent ERP, in the cloud, adopting the “Rise with SAP” programme to support the modernisation of its Enterprise Tax Management Platform (ETMP), according to SAP.

SAP stated this will give HMRC staff greater confidence in real-time analysis and reporting, while also supporting a more responsive and transparent experience for taxpayers.

The deal is also said to support the government’s artificial intelligence (AI) ambitions and “being hosted on SAP’s UK sovereign cloud provides a localised solution that creates a foundation for future innovation”.

As a Rise programme customer, HMRC was flagged in SAP’s most recent earnings statement, released last week, alongside Adidas, H&M Group and Weir Group, which are also on the programme.

Rise is aimed at moving customers to the cloud and to use SAP’s ERP system, S/4Hana, based on its in-memory Hana database. Rise was launched as a “business transformation-as-a-service” programme in 2021.

SAP described ETMP as “the strategic technology backbone of HMRC’s tax accounting and payment capability”. It supports over 45 tax regimes and is used daily by tens of thousands of staff to manage over £800bn in tax revenue each year.

HMRC is a long-time SAP customer. It has been developing and using its SAP-based ETMP since 2004. The platform was built on SAP ECC 6.0, which SAP will stop supporting in 2027. The department established an ETMP Regeneration Programme in 2023, which proposed migrating to S/4Hana after a pilot project. Sign-off was approved in January 2025 by Jim Harra, chief executive of HMRC.

SAP said that by moving to the cloud with Rise with SAP, HMRC will replace its legacy systems and simplify its technology landscape. As part of the deployment, HMRC will implement SAP S/4Hana Cloud, SAP’s UK Sovereign Cloud, SAP Business Technology Platform and SAP AI Capabilities.

Leila Romane, managing director for the UK and Ireland at SAP, said: “Large-scale public systems like those delivered by HMRC must operate reliably at national scale while adapting to changing demands.

“By modernising one of the UK’s most important platforms and hosting it on a UK sovereign cloud, we are helping to strengthen the resilience, security and sustainability of critical national infrastructure.”

SAP claimed it would work with HMRC to define new AI capabilities aimed at improving taxpayer experiences, surfacing insights faster, automating processes and enhancing decision-making across tax administration.

HMRC also went out to tender for a customer relationship management (CRM) system in April 2025, worth up to £1bn, as well as a contact centre-as-a-service (CCaS) provider, with an estimated contract value of £500m. Estimated contract dates for the CRM system were 2 February 2026 to 1 February 2036, as of 2 June 2025.