A new report reveals that costs for remediating legacy systems at HMRC have surged by up to 390%. Estimated IT costs for tax-related digital programs are projected to reach £482 million in 2023-24, with many projects taking longer and incurring higher costs than anticipated due to unforeseen complications. The report highlights the long-standing issues of outdated systems, some over 30 years old, resulting from previous cost-cutting measures. Currently, numerous essential services still rely on legacy systems, and the NAO criticizes HMRC for inadequately tracking maintenance costs of these systems.
HMRC has recognised that, due to the need in the past to forgo operational maintenance and upgrades to its systems to secure cost savings, its IT systems now constitute a significant risk to the Department.
Costs associated with the remediation of legacy systems have risen by up to 390 percent, impacting substantial tax-related digital programs and extending project timelines.
As of March 2024, 372 of 545 services had been successfully migrated and 49 had been remediated, leaving 124 legacy systems still in place.
The NAO reported that HMRC does not track how much of its digital costs are incurred maintaining and updating legacy tax systems, some of which are over 30 years old.
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