HMRC plans to create predictive analytics system to identify insolvency risks

The HMRC is seeking a technology partner with a proven track record in modelling insolvency risk

HMRC is looking for a technology partner to provide a system that can use predictive analytics to identify areas of insolvency risk.

The system will be used to ensure HMRC gets the tax it is owed by companies by alerting the department if a firm is at risk from insolvency.

HMRC's public tender says that the successful organisation will work alongside the department's internal IT specialists to create the analytics system under a one-year contract worth up to £5m.

"The external partner must have highly relevant experience of modelling insolvency risk, for example from working on projects of a similar scale for other tax administrations, major retail banks, telecommunication or utility companies," the tender says.

The tender also highlights how HMRC is undergoing a significant digital transformation process and will require the analytics system to not only fit in with its existing IT systems but also have the flexibility to evolve with them.

"The analytics solution, therefore, will need to be sufficiently flexible for HMRC to adjust or rebuild it to retain its functionality after changes to HMRC's IT infrastructure," the tender says.

"The analytics solution must be developed in a manner that will allow it to be readily integrated into, and used on, HMRC's existing IT infrastructure platforms. HMRC is not seeking to procure any additional IT or data analytics tools."

As such, organisations looking to pitch for the tender will need to ensure they have sufficient expertise in dealing with insolvency risk predictive analytics modes as well as the capabilities to work within the confines of an IT infrastructure over which they have no direct influence.

The HMRC tender is yet another clear indication that the government is getting serious with its mission to undergo a digital transformation doctrine to move away from legacy IT and long contracts with large suppliers, as well as adopt emerging technologies such as blockchain.