Wales turns to cloud for first tax collecting system in 800 years

Under recent (2014 and 2017) extensions of devolution, Wales has needed a separate body to collect revenue from taxes that HMRC no longer does - Land Transaction Tax and Landfill Disposal Tax, which replaced Stamp Duty Land Tax and Landfill Tax from 1 April 2018.

A bit ‘yawn’ (or even ‘ddiflas’)? Well, once you realise that this is something that hasn’t happened for 800 years, even tax starts to get pretty interesting, you have to admit - and when you hear that an IT system to make it happen had to be up and running in three months, then it really does start to get exciting.

That body finally opened its doors in October last year - the Welsh Revenue Authority (WRA) (Awdurdod Cyllid Cymru). But while there may be a physical office in Pontypridd, from the get-go the Authority has decided to be as aggressively digital and cloud-native as possible, its Head of Digital and Technology, Anthony Pritchard, told diginomica/government:

“The Welsh Government decided they wanted a separate organisation to collect these taxes and because we're handling sensitive taxpayer information, you have to have a completely separate organisation from Welsh Government so that Welsh Ministers cannot have direct access to that information.

As a result, a new type of institution in Wales, a non-ministerial government department, had to be created, whose sole role was for the collection of taxation - a completely new organisation, and where nothing could be inherited from the Welsh Government.

So the decision was made, ‘Well, if we're going to have to create something new, then why not just go Cloud First, as it seems a sensible thing to do.’”

£1 billion collected

Planning started for the Authority in 2016, adds Pritchard, with the site going live for first registrations in February, and for the collecting of taxes, on the 1st of April, 2018 - so cloud has been the primary way for collecting these devolved taxes for the Welsh Assembly since the start of the current tax year (April).

The system is claimed to have offered 99.9999% availability and customer satisfaction scores of 85% in the first six months, based on feedback from about 5000 initial users, and 30,000 Land Transaction Tax transactions reported. Pritchard and his team believe they will administer the collection of around £1 billion in taxes over the next four years.

As a result, Pritchard is completely confident that he’s adopted the right technology for the task at hand:

“I think that lots of organisations have got legacy for the infrastructure and stuck with it, because that's how everything used to be. But I think that for most organisations, it doesn't matter whether it's government or not, cloud is a really good solution for most things they want to do. I think most organisations, if they have their time again, would probably be all cloud, because infrastructure can be quite an overhead.

“Plus, we're quite small - we’re only 70 people. What we didn't want to become is an infrastructure specialist and essentially start creating data centres, which is what you become. Cloud was very good for us, actually, as we didn't have to worry about a lot of things, as you're effectively outsourcing that service to, in this case, Microsoft: all the infrastructure is taken care of.

Pritchard also advocated that cloud gave the Authority flexibility, but also created some new problems. He said:

“What cloud also gives you is a huge amount of flexibility. If I need to create new environments to do testing or performance testing or security testing, it's literally, press a button and it's done: I use it, switch it off, a couple days later when I don't need it. That sort of of flexibility, especially for a brand new organisation like WRA when we don't really know everything that we're going to do because we've only just been established and we don't know what future things we might have to do - having that flexibility is really important.

“When you talk to a lot of vendors, what they often talk about is hybrid models - how will you link your infrastructure with the cloud?. But we've got nothing to integrate with - we’ve just got cloud. That presents some unique problems that we've had to overcome, but it's been very useful to go through that experience because now we've done it, we don't have to experience all the problems of having infrastructure, which is quite a relief.”

‘No-one likes paying tax’

The system also offers a number of distinctly Welsh characteristics such as aligning with wider Assembly initiatives to support use of the Welsh language and have a million Welsh speakers by 20150 by bi-lingual in-form toggling, and seems to have crossed the digital divide pretty successfully, given that a claimed 97% of all transactions with Welsh citizens or businesses have happened online.

In terms of specific technologies to achieve all this, Welsh Revenue Authority is using a system designed and implemented by digital platform and service provider Kainos using Microsoft Azure Platform-as-a-Service (PaaS) technology, and which integrates with Corporate Finance, Tax Managements Finance and HR services being used by the Authority delivered by another vendor, SA Global. For Pritchard:

“As we were spun out of Welsh Government and a lot of IT there - and in the rest of UK government - is based on Microsoft, it seemed the natural thing to use the Microsoft product set because we had the skills to help us with that. We then went through a quite competitive procurement process looking for an agile partner that had the experience of delivering this sort of platform solution and the track record of doing things like this.”

Where would WRA like to go next with its powerful new cloud toy, now that it’s proven its initial worth? For Pritchard, the answer is already clear - make the service even better for service users:

“Ultimately, what we're doing is collecting tax so we can have better public services in Wales. If we can do that as efficiently as possible, then that's fantastic.

“And nobody likes paying tax, let's be honest - but we're trying to make the process as easy as possible for people.”