HM Revenue and Customs (HMRC) has revised its IT services contract with supplier Capgemini.

The original £2.8bn contract, known as "Aspire", was struck between HMRC and Capgemini in 2004 and was due to expire in 2014.

Halfway through its running time, that contract has now been revised to enable HMRC to reduce its IT costs. The contract will now run until 2017.

Capgemini and its subcontractors on the contract, Fujitsu and Accenture, will put in a transformation programme to update and standardise systems that they say will save HMRC £110m a year from 2012, in addition to the £70m per annum savings committed to in 2007.

The existing desktop service has also been extended, meaning Capgemini will continue to procure desktop IT on behalf of HMRC.

Fujitsu will continue to deliver datacentre services exclusively until 2015.

Lesley Strathie, chief executive and permanent secretary for HMRC said: " HMRC and Capgemini have worked together to achieve outstanding savings for the department. This is just one way in which HMRC will be reducing operating costs and it signals our intent to bring IT costs down as announced in the 2009 budget."

In 2007 the influential Public Accounts Committee ordered HMRC to squeeze more value out of the Aspire contract after it was revealed that Capgemini would net more than £1.1bn in profit from the contract.

Earlier this year, Computer Weekly reported that Capgemini and Fujitsu were looking to outsource some tax processing to India as part of an internal project to reduce costs.