--- title: "VAT Split Payments" ocid: "ocds-h6vhtk-03c230" canonical_url: "https://d3tenders.com/contract/?ocid=ocds-h6vhtk-03c230" markdown_url: "https://d3tenders.com/contract/ocds-h6vhtk-03c230.md" json_url: "https://d3tenders.com/contract/ocds-h6vhtk-03c230.json" source: "Find A Tender Service" current_stage: "Tender" buyer: "H M REVENUE & CUSTOMS" published: "2023-04-20" --- # VAT Split Payments Buyer: H M REVENUE & CUSTOMS Current stage: Tender OCID: ocds-h6vhtk-03c230 [View canonical contract page](https://d3tenders.com/contract/?ocid=ocds-h6vhtk-03c230) [Download OCDS JSON](https://d3tenders.com/contract/ocds-h6vhtk-03c230.json) ## Summary 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. ## Notice 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). ## Key Details | Field | Value | | --- | --- | | Publication source | Find A Tender Service | | Latest notice | https://www.find-tender.service.gov.uk/Notice/011289-2023 | | 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 | | All stages | Tender | ## Dates | Field | Value | | --- | --- | | Publication date | 20 Apr 2023 | | Submission deadline | 22 May 2023 | | Future notice date | Not specified | | Award date | Not specified | | Contract period | Not specified | | Recurrence | Not specified | ## Values | Field | Value | | --- | --- | | Tender value | £4,000,000 | | Lots value | Not specified | | Awards value | Not specified | | Contracts value | Not specified | ## Status | Field | Value | | --- | --- | | Tender status | Active | | Lots status | Active | | Awards status | Not specified | | Contracts status | Not specified | ## Buyer | Field | Value | | --- | --- | | Main buyer | H M REVENUE & CUSTOMS | | Locality | SALFORD | | Post town | Manchester | | Postcode | M5 2BH | | Country | England | | ITL 1 | TLD North West (England) | | ITL 2 | TLD3 Greater Manchester | | ITL 3 | TLD34 Greater Manchester South West | | Local authority | Salford | | Electoral ward | Quays | | Westminster constituency | Salford | | Delivery location | Not specified | ## CPV Codes ### Divisions - 48 - Software package and information systems - 66 - Financial and insurance services - 72 - IT services: consulting, software development, Internet and support ### 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 ## Release History - 20 Apr 2023 at 07:07 - Tender - Tender Notice - https://www.find-tender.service.gov.uk/Notice/011289-2023 ## Notice URLs - http://hmrc.supplier-eu.ariba.com/ad/register/SSOActions?type=full - http://www.gov.uk - http://www.hmrc.gov.uk ## Provenance This Markdown file is an alternate public rendering of the D3 Tenders contract record. The canonical page is https://d3tenders.com/contract/?ocid=ocds-h6vhtk-03c230. The underlying structured data is available as OCDS JSON at https://d3tenders.com/contract/ocds-h6vhtk-03c230.json.