Contract notice
Section I: Contracting
authority
I.1) Name and addresses
H M Revenue & Customs
Trinity Bridge House
Salford
M5 2BH
UK
Contact person: James Power
E-mail: james.power1@hmrc.gov.uk
NUTS: UK
Internet address(es)
Main address: www.gov.uk
I.3) Communication
Access to the procurement documents is restricted. Further information can be obtained at:
www.hmrc.gov.uk
Additional information can be obtained from the abovementioned address
Tenders or requests to participate must be sent electronically to:
http://hmrc.supplier-eu.ariba.com/ad/register/SSOActions?type=full
I.4) Type of the contracting authority
Other: Non Ministerial Dept
I.5) Main activity
Other: Direct and Indirect Taxes
Section II: Object
II.1) Scope of the procurement
II.1.1) Title
VAT Split Payments
II.1.2) Main CPV code
66110000
II.1.3) Type of contract
Services
II.1.4) Short description
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 £4,000,000 (Vat Excl), the cap for any individual contract will be £1,666.666 (Vat Excl).
II.1.5) Estimated total value
Value excluding VAT:
4 000 000.00
GBP
II.1.6) Information about lots
This contract is divided into lots:
No
II.2) Description
II.2.2) Additional CPV code(s)
48110000
48170000
48441000
48442000
66151000
66170000
72200000
II.2.3) Place of performance
NUTS code:
UK
II.2.4) Description of the procurement
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 £4,000,000 (Vat Excl), the cap for any individual contract will be £1,666.666 (Vat Excl).
II.2.5) Award criteria
Price is not the only award criterion and all criteria are stated only in the procurement documents
II.2.7) Duration of the contract, framework agreement or dynamic purchasing system
Duration in months: 19
This contract is subject to renewal: No
II.2.9) Information about the limits on the number of candidates to be invited
II.2.10) Information about variants
Variants will be accepted:
No
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Section III: Legal, economic, financial and technical information
III.1) Conditions for participation
III.1.1) Suitability to pursue the professional activity, including requirements relating to enrolment on professional or trade registers
List and brief description of conditions:
A Tenderer's ability to cover both Card and Non-Card forms of payment is a mandatory requirement for participation in the PoC.
III.2) Conditions related to the contract
III.2.3) Information about staff responsible for the performance of the contract
Obligation to indicate the names and professional qualifications of the staff assigned to performing the contract
Section IV: Procedure
IV.1) Description
IV.1.1) Type of procedure
Open procedure
IV.1.8) Information about Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement:
No
IV.2) Administrative information
IV.2.2) Time limit for receipt of tenders or requests to participate
Date:
22/05/2023
Local time: 14:00
IV.2.4) Languages in which tenders or requests to participate may be submitted
EN
IV.2.6) Minimum time frame during which the tenderer must maintain the tender
Duration in months: 6 (from the date stated for receipt of tender)
IV.2.7) Conditions for opening of tenders
Date:
22/05/2023
Local time: 15:00
Section VI: Complementary information
VI.1) Information about recurrence
This is a recurrent procurement:
No
VI.3) Additional information
This requirement will be met by an eSourcing RfP using HMRC SAP Ariba. Please ensure you are registered with the HMRC SAP Ariba to gain access to the RfP documentation which will contain full details.
If you are not already registered, the registration link is: http://hmrc.supplier-eu.ariba.com/ad/register/SSOActions?type=full
As part of the registration process you will receive a system generated email asking you to activate your SAP Ariba supplier account by verifying your email address.
Once you have completed the activation process you will receive a further email by return confirming the 'registration process is now complete' and providing you with 'your organisation's account ID' number. If an email response from HMRC is not received within one working day of your request, please re-contact sapariba.hmrcsupport@hmrc.gsi.gov.uk (after first checking your spam in-box) confirming when your registration request was first made.
Once you have obtained 'your organization's account ID' number, please email james.power1@hmrc.gov.uk and copy in Ian.anderson1@hmrc.gov.uk and e.procurement@hmrc.gov.uk with your account ID number, you will then receive an e-mail confirming access. Further information about HMRC's procurement tool SAP Ariba, Suppliers Guide and general information is available on the HMRC website: www.hmrc.gov.uk/about/supplying.htm If you have already registered on SAP Ariba then you may also need to re-register on HMRC's SAP Ariba in order to be added to the event.
VI.4) Procedures for review
VI.5) Date of dispatch of this notice
20/04/2023