HM Revenue & Customs has begun the procurement process for a new contract to run and modernise its National Insurance and PAYE System (NPS), with the deal potentially worth up to £500 million over as long as seven years. The move matters because NPS is critical national infrastructure, handling a significant share of UK tax collection, and HMRC wants to shift it away from ageing, inflexible technology towards a more modern, adaptable setup capable of real-time processing.

HMRC has issued a preliminary market engagement notice describing NPS as running on "legacy technology estate with limited modularity and scalability" and says it wants to move to a more agile, service-oriented architecture to support income tax and National Insurance administration. A supplier engagement event is planned for next month, with a formal tender expected in September and the new contract due to start in June 2027. NPS, introduced in 2009 under the £10 billion Aspire contract alongside Capgemini, Fujitsu and BT, is currently run by Accenture, which was handed an extra £35.2 million without competition last year on top of a £70.4 million contract; the system serves nearly 40,000 users across HMRC and the Department for Work and Pensions and collects around 40 percent of Treasury revenue.