The Organisation

As the government department that collects tax in order to fund the UK’s public services, Her Majesty’s Revenue and Customs (HMRC) is responsible for over 70% of all central government transactions. Whilst achieving a 22% reduction in its budget over four years, HMRC also has to improve operational performance, continue to close the £35 billion “tax gap” and enhance customer service and data security.


HMRC faces the challenge of transforming a centuries-old organisation into a digital, modern, real time business. The government’s “Making Tax Digital” strategy commits to reducing effort for taxpayers and building a transparent and accessible tax system fit for the digital age. By 2020, every individual and small business will have access to their own secure digital tax account where they can register, file, pay and update their information online at any time. For the vast majority, there will be no need to fill in an annual tax return.

Alongside the 90 million online transactions HMRC processes each year, the department also receives over 70 million phone calls a year. This makes customer contact an ongoing challenge involving thousands of advisers who face the additional difficulty of extra customer demand concentrated into to particularly large peaks during the year.

In 2013, HMRC came to market to replace an aging call centre estate located at 21 sites in the UK. The requirement was to:

  • Replace site-based Automated Call Distribution (ACD) and Interactive Voice Response (IVR) systems
  • Provide network call routing for over 70 million calls per year
  • Migrate call recording and speech recognition technology
  • Develop a new adviser interface (HMRC’s term for a call centre agent)
  • Provide a new management information system to help provide a single view of the customer journey

Rather than simply replace technology, HMRC identified a series of business outcomes to be achieved by the new system:

  • Improvement of customer service
  • Flexibility to manage the peaks during the year
  • Create a platform that would support business priorities such as the “Making Tax Digital” strategy
  • Ability to provide individual, personalised service through a wide range of channels
  • Increased access for individuals requiring enhanced support

Finding the right partner to help drive digital transformation and stay to build future strategies in the department was crucial for HMRC. It required a supplier who would take appropriate levels of risk, break established and inefficient behaviours and quickly bring the solution to life in collaboration with the incumbent supplier ecosystem. The contract marked the government’s move away from the Aspire consortium model, driven by a desire for smaller, more flexible contracts with both new and existing suppliers, particularly agile SMBs. This was to be the first HMRC contract within the new framework that dealt directly with the supplier, which was a unique aspect of the project.

Following an extensive and competitive ITT process, KCOM was awarded the contract in January 2014. The department chose KCOM for its business-led, consultative response, and ability to overcome complexity to create a more agile environment. As a vendor and partner-agnostic company KCOM works creatively with existing and new suppliers to find ways of increasing organisational agility. This was important as it allowed KCOM to support HMRC flexibly within the government procurement framework.


KCOM designed and built the private-cloud-based Customer Service Platform on KCOM Workplaces, KCOM’s flagship product using Cisco HCS technology for large scale cloud deployments. In under 10 weeks KCOM delivered an accelerated site-based roll out to 21 locations and just under 7,000 personal tax staff. Deployment was completed on-schedule in December 2014 – which allowed HMRC adequate time to handle the Self-Assessment peak in January 2015. An early-adopter approach was initially used to test and fine-tune functionality before local sites were transitioned at the rate of three per week.

The KCOM Customer Service Platform for HMRC is the largest Cisco hosted contact centre service (HCS) deployment in the world and is operated as a highly available, virtual contact centre service supported by KCOM’s 24-hour Service Management Centre. This enables KCOM to deliver high levels of service availability in excess of 99.99%.

The Customer Service Platform can simultaneously support 12,000 inbound calls and 4,000 webchats, with all calls recorded and stored for 7 years within KCOMs secure hosted environment. Call recordings can be searched and played back by team leaders, analysed using key words and phrases through speech analytics to identify customer behaviour, emotion and sentiment. This provides HMRC with insight into improving processes and the end-to-end customer experience, allowing the department to gain a single view of the customer.


In KCOM HMRC found a partner to help drive digital transformation throughout their organisation, listening and then creating an IT environment that met HMRC’s needs. The company’s experience in modernising legacy systems to extend their useful life and improve flexibility meant that the HMRC project ran at an increased speed and scale compared to previous projects. By managing complexity on its behalf, KCOM enabled HMRC to focus on creating a better customer experience.

Ultimately, KCOM’s solution has reduced HMRC’s overall dependency on infrastructure as cloud-based capabilities allow staff to work with previously unimagined levels of flexibility. The adviser’s desktop build allows them to take calls via softphone and also re-task some 7,000 back office workers to help handle the peaks in demand. Automated identity and verification (ID&V) services confirm the caller’s identity before the call is delivered to an adviser, therefore removing this task from the adviser and saving around a minute per call.

The efficient delivery of calls and automated ID&V is estimated to save HMRC the cost of 1,000 full team equivalent (FTE) heads and allows the adviser to offer an improved customer experience. During the self-assessment peak in January and the tax credit peak from early May until the end of July – the KCOM Customer Service Platform for HMRC typically handles about 300,000 inbound calls per day!

Since the initial implementation for Personal Tax, KCOM has expanded the Customer Service Platform to support Debt Management, Business Tax, multiple Helpline back-office functions, a 24hour Service Desk and the Valuation Office Agency. HMRC and KCOM also added biometric capabilities to the system in 2017 allowing callers to identify themselves via voice. This is believed to already be the largest public-facing public sector voice biometric service in the world, with almost 3 million registered users.

HMRC pays for the solution with a usage based commercial model, removing traditional CapEx frustrations. Furthermore, each Directorate or department has a unique set of requirements that are not only delivered by KCOM under a shared service model, but can take advantage of existing investment and a common platform approach. The solution has grown and is now configured to support 30,000 telephony advisers, 4,000 multi-channel advisers and 12,000 concurrent calls.

With a peak of 600 agents using web chat, over 1.6 million adviser assisted web chat sessions have provided HMRC with a three—fold increase in channel productivity whilst deflecting 77% of telephone calls and increasing customer satisfaction. Digital channel support is offered to Self-Assessment and Online Services customers based upon their browsing behaviour on the public web site, with a conversion rate of between 10-15%.

HMRC has proved itself a highly dynamic and innovative partner, willing to trial new technology though agile, interactive processes. The delivery capability of KCOM coupled with platform flexibility, in-life service delivery and the agility to implement new technologies and services has meant that HMRC has met its key business outcome criteria.

HMRC continues to innovate and is an exemplar in Central Government,” said Stephen Long, EVP at KCOM “HMRC now has a flexible yet reliable basis for its digital transformation plans, and the experience of HMRC’s 50 million customers will continue to improve in leaps and bounds."