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VAT Split Payments

H M Revenue & Customs

This public procurement record has 1 release in its history.

Tender

20 Apr 2023 at 08:07

Tender Notice
Summary of the contracting process

The procurement process for the "VAT Split Payments" tender, initiated by His Majesty's Revenue and Customs (HMRC), involves the development of a Proof of Concept (PoC) to demonstrate the extraction of VAT from payments on real-time channels. HMRC plans to split payments for goods and services to tackle overseas VAT non-compliance by creating innovative payment solutions. The PoC will be conducted in 3 phases, with completion deadlines set for May 2024 and January 2025. HMRC aims to award contracts worth up to £4,000,000 under this tender to develop solutions for both card and non-card payment methods.

This opportunity presents businesses in the financial services and technology sectors with a chance to showcase their capabilities in real-time payment interventions and VAT compliance. Companies offering software development, financial analysis, consultancy services, and payment processing are well-suited to compete. The tender process, following an open procedure, requires suppliers to cover both card and non-card payment forms. Interested parties should note the submission deadline of May 22, 2023, to participate in this innovative initiative led by HMRC to drive technological advancements in VAT payment processing.

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Notice Information

Notice Title

VAT Split Payments

Notice Description

His Majesty's Revenue and Customs (HMRC) invites interested persons (Tenderers) to tender for a contract to develop a Proof of Concept (PoC) to illustrate how extraction of VAT from payments (split payment) on real-time payment channels could work. The concept of the PoC is the idea that a payment might be split into elements which are then routed to different destinations. In a VAT context that is the notion that when qualifying goods or services are bought, the VAT within the purchaser's payment could be routed to HMRC and the seller only receives the net amount. Initial focus is on exploring the feasibility of splitting payments in a specific area of VAT for goods and services bought by UK consumers from non-compliant overseas sellers. This will test a range of capabilities including the technology's ability to know when VAT is chargeable or not. Also, whether an intervention can be made without the consent of the seller or buyer, something that, as far as we are aware, known examples of split payment elsewhere are unable to do. Such a mechanism would be driven by either payments system messages (e.g. the location of a seller or a buyer) or new data sources (e.g. product codes, e-invoices or equivalent). Currently, as far as we are aware, there are no marketed solutions available, and we are not aware of others asking the market to develop such solutions. HMRC's current emphasis is only to discover whether technology is capable of real-time payment interventions to tackle overseas VAT non-compliance. This will inform policy development and dialogue. The PoC will be carried out in 3 Phases (Phase 1 - Basic Capability Development, Phase 2 - Targeted Capability Development, Phase 3 - Advanced Capability Development), Phases 1 and 2 of the PoC must be completed no later than 31 May 2024, and all Phases of the PoC must be completed and invoiced before 31 January 2025. However, HMRC would prefer completion of all three (3) Phases by 31 July 2024 if possible. Within these deadlines the timings of the Phases are for the Tenderers to determine as part of their proposal. HMRC intends to award up to a maximum of three (3) contracts in relation to this PoC to develop solutions for both card (Card payments should be taken to mean payments through debit and credit cards, as well as linked uses of digital wallets (whereby a wallet acts as a processing portal through which a payment from a linked card is made) and non-card payments (Non-Card payments should be taken to mean both Bacs and Faster Payments, and include linked uses of digital wallets (whereby a wallet is pre-loaded with funds transferred to it). A Tenderer's ability to cover both of these forms of payment is a mandatory requirement for participation in the PoC. The overall funding available for all contracts awarded under this PoC is PS4,000,000 (Vat Excl), the cap for any individual contract will be PS1,666.666 (Vat Excl).

Lot Information

Lot 1

His Majesty's Revenue and Customs (HMRC) invites interested persons (Tenderers) to tender for a contract to develop a Proof of Concept (PoC) to illustrate how extraction of VAT from payments (split payment) on real-time payment channels could work. The concept of the PoC is the idea that a payment might be split into elements which are then routed to different destinations. In a VAT context that is the notion that when qualifying goods or services are bought, the VAT within the purchaser's payment could be routed to HMRC and the seller only receives the net amount. Initial focus is on exploring the feasibility of splitting payments in a specific area of VAT for goods and services bought by UK consumers from non-compliant overseas sellers. This will test a range of capabilities including the technology's ability to know when VAT is chargeable or not. Also, whether an intervention can be made without the consent of the seller or buyer, something that, as far as we are aware, known examples of split payment elsewhere are unable to do. Such a mechanism would be driven by either payments system messages (e.g. the location of a seller or a buyer) or new data sources (e.g. product codes, e-invoices or equivalent). Currently, as far as we are aware, there are no marketed solutions available, and we are not aware of others asking the market to develop such solutions. HMRC's current emphasis is only to discover whether technology is capable of real-time payment interventions to tackle overseas VAT non-compliance. This will inform policy development and dialogue. The PoC will be carried out in 3 Phases (Phase 1 - Basic Capability Development, Phase 2 - Targeted Capability Development, Phase 3 - Advanced Capability Development), Phases 1 and 2 of the PoC must be completed no later than 31 May 2024, and all Phases of the PoC must be completed and invoiced before 31 January 2025. However, HMRC would prefer completion of all three (3) Phases by 31 July 2024 if possible. Within these deadlines the timings of the Phases are for the Tenderers to determine as part of their proposal. HMRC intends to award up to a maximum of three (3) contracts in relation to this PoC to develop solutions for both card (Card payments should be taken to mean payments through debit and credit cards, as well as linked uses of digital wallets (whereby a wallet acts as a processing portal through which a payment from a linked card is made) and non-card payments (Non-Card payments should be taken to mean both Bacs and Faster Payments, and include linked uses of digital wallets (whereby a wallet is pre-loaded with funds transferred to it). A Tenderer's ability to cover both of these forms of payment is a mandatory requirement for participation in the PoC. The overall funding available for all contracts awarded under this PoC is PS4,000,000 (Vat Excl), the cap for any individual contract will be PS1,666.666 (Vat Excl).

Notice Details

Publication & Lifecycle

Open Contracting ID
ocds-h6vhtk-03c230
Publication Source
Find A Tender Service
Latest Notice
https://www.find-tender.service.gov.uk/Notice/011289-2023
Current Stage
Tender
All Stages
Tender

Procurement Classification

Notice Type
Tender Notice
Procurement Type
Standard
Procurement Category
Services
Procurement Method
Open
Procurement Method Details
Open procedure
Tender Suitability
Not specified
Awardee Scale
Not specified

Common Procurement Vocabulary (CPV)

CPV Divisions

48 - Software package and information systems

66 - Financial and insurance services

72 - IT services: consulting, software development, Internet and support

CPV Codes

48110000 - Point of sale (POS) software package

48170000 - Compliance software package

48441000 - Financial analysis software package

48442000 - Financial systems software package

66110000 - Banking services

66151000 - Financial market operational services

66170000 - Financial consultancy, financial transaction processing and clearing-house services

72200000 - Software programming and consultancy services

Notice Value(s)

Tender Value
£4,000,000 £1M-£10M
Lots Value
Not specified
Awards Value
Not specified
Contracts Value
Not specified

Notice Dates

Publication Date
20 Apr 20233 years ago
Submission Deadline
22 May 2023Expired
Future Notice Date
Not specified
Award Date
Not specified
Contract Period
Not specified - Not specified
Recurrence
Not specified

Notice Status

Tender Status
Active
Lots Status
Active
Awards Status
Not Specified
Contracts Status
Not Specified

Buyer & Supplier

Contracting Authority (Buyer)

Main Buyer
H M Revenue & Customs
Contact Name
Available with D3 Tenders Premium →
Contact Email
Available with D3 Tenders Premium →
Contact Phone
Available with D3 Tenders Premium →

Buyer Location

Locality
SALFORD
Postcode
M5 2BH
Postcode Area
Manchester
Country
England
Major Region (ITL 1)
TLD North West (England)
Basic Region (ITL 2)
TLD3 Greater Manchester
Small Region (ITL 3)
TLD34 Greater Manchester South West
Delivery Location
Not specified
Local Authority
Salford
Electoral Ward
Quays
Westminster Constituency
Salford

Further Information

Open Contracting Data Standard (OCDS)

View full OCDS Record for this contracting process

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The Open Contracting Data Standard (OCDS) is a framework designed to increase transparency and access to public procurement data in the public sector. It is widely used by governments and organisations worldwide to report on procurement processes and contracts.

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