Corporate report

Voluntary, community and social enterprise action plan for 2025 to 2026

Published 31 March 2025

Foreword

Senior Civil Service statement

At HM Revenue and Customs (HMRC), we are committed to fostering a collaborative and inclusive environment for Voluntary, Community, and Social Enterprise (VCSE) organisations. We recognise the invaluable contributions of VCSEs in delivering public services and their deep connections to the communities they serve and the environment.

Our strategic objectives are designed to ensure that we collect the right taxes, provide the right financial support, and maintain a fair and resilient tax administration system. We are dedicated to making it easier for our customers to get their tax right, supporting self-service online, and working with partners to build trust in the tax and customs system.

This action plan highlights our priorities for 2025 to 2026, focusing on improving our understanding of the VCSE sector, reducing barriers to entry, and increasing VCSE participation in procurement bids. By creating a more flexible and inclusive commercial system, we aim to benefit suppliers of all sizes, including charities and social enterprises.

We invite you to explore the opportunities outlined in this document and join us in our mission to enhance public services through collaboration and innovation. Your engagement and feedback are crucial to our success. Together, we can build a stronger, more resilient, and compassionate society.

Thank you for your continued support and partnership.

Andy Williamson
Head of the Purpose Steering Group

VCSE Crown representative statement

In my role as the Crown Representative for the VCSE, I act as an intermediary between government and the charity and social enterprise sectors to champion the Public Services (Social Value) Act and improvements in commissioning and procurement practices. As part of this, I am very keen to work with all government departments to share best practice and to promote the benefits of working with VCSE organisations.

Having worked closely with HMRC, I am looking forward to supporting HMRC making renewed progress with VCSEs and seeing them increase the amount of business they partner with VCSEs on. This action plan builds on previous achievements and will help HMRC to deliver on their ambitious plans for VCSE engagement.

I very much look forward to continuing working with my departmental colleagues to help support them in achieving these targets.

Claire Dove CBE
VCSE Crown Representative, Cabinet Office

Introduction to HMRC

Department overview

HMRC is a non-ministerial department established by the Commissioners for Revenue and Customs Act (CRCA) 2005, replacing the Inland Revenue and Customs and Excise. We are the UK’s tax, payments, and customs authority, and we have a vital purpose: we collect the money that pays for the UK’s public services and help families and individuals with targeted financial support.

Our current priorities are:

• to improve day-to-day performance and the experience of our customers
• to close the tax gap
• to reform and modernise tax and customs administration

To achieve these , we will need to work closely with our third-party suppliers and supply chain to invest in skills, do more to improve our workplaces and modernise the IT tools and systems we use, so that it’s easier and quicker to do our jobs.

Read more about HMRC and what we do.

Why we’ve created this action plan

HMRC is committed to improving its understanding of VCSE (Voluntary, Community and Social Enterprise) organisations in its sectors and the markets it purchases from, with the aim to increase VCSE appetite to participate in procurement bids and reduce barriers to entry. VCSEs play a vital role in the delivery of public services and many have strong links to the communities they serve. Their knowledge and connection to local areas ideally places them to help create compassionate, responsive and efficient public services.

The government supports charities and social enterprises by bringing social value into public procurement, ensuring contracts are awarded on the basis of not only prices, but also the supplier’s social impact. The Public Services (Social Value) Act, the Social Value model, first introduced through Social Value Model (PPN 06/20) and the ability to reserve below threshold procurements for VCSEs and SMEs (first introduced under PPN 11/20) all illustrate the government’s commitment to providing VCSE organisations with much deserved recognition while ensuring that the additional social benefits that can be achieved in the delivery of contracts is taken into account.

The new Procurement Act 2023 introduces further legislation to support the VCSE sector by reforming public procurement law to improve the way procurement is done. This more flexible commercial system will benefit suppliers of all sizes, including charities and social enterprises who will be able to keep track of upcoming opportunities, tender notices, and at least 18 months’ worth of planned procurements on a new centralised platform.

Future opportunities

Our opportunities for VCSE spend can be split across our 3 core spend categories:

• IT
• People and Professional Services
• Corporate Services and Property

An overview of these 3 categories and the anticipated commercial opportunities for VCSEs are summarised below:

IT category

Our IT category is split across the following main service areas:

• Applications
• Enterprise Business Platforms
• Digital Delivery Services and Quality Assurance
• Customer Engagement
• Data and Business Intelligence
• Service Management and Integration
• Infrastructure
• Cyber Security and Networks
• Data Warehouse and Platforms
• Operating and End User Systems
• Physical and Cloud Infrastructure

One of HMRC’s current IT programmes is called Our Future CDIO (Chief Digital Information Office), formally the Technology Sourcing Programme. This programme aims to facilitate implementation of CDIO’s new Target Operating Model, which will enhance the way we operate technology solutions to meet future demands for improved tax and benefits systems for the UK population.

Some upcoming procurement activities anticipated to be undertaken in this area which may provide further opportunities for VCSEs either directly or within the supply chain include:

• all-off competitions from the Crown Commercial Service (CCS) Big Data and Analytics Framework which HMRC sponsored and delivered with Crown Commercial Service
• call-off competitions from the new Digital and Legacy Application Services (DALAS) Framework

People and Professional Services category

Our People and Professional Service categories encompasses areas such as:

• Learning and Development, including a sub-category for apprenticeships
• Contingent Labour
• Recruitment
• Consultancy
• Professional Service (non-IT)

Learning and development:

We access services through the Government Campus which provides access to 163 suppliers.

Apprenticeships:

We are working hard to explore opportunities for VCSE engagement via the CCS Apprenticeship Training Dynamic Marketplace, which is available to all central government departments, and currently has 183 appointed suppliers.

Permanent recruitment:

We access recruitment services to hire permanent, fixed term and internal secondment roles through CCS Permanent Recruitment 2 Framework, which provides access to 63 appointed suppliers.

Consultancy and professional service:

We primarily compete requirements through CCS Management Consultancy Framework 3, which provides access to 163 suppliers.

Corporate Services and Property category

Our Corporate Services and Property category is split across the following main service areas:

• Travel and Fleet Management
• Marketing and Communications
• Input and Output Print Services
• Logistics
• Research
• Post and Courier Services
• Financial and Banking Services
• Facilities Management (for example, reactive building maintenance, cleaning, and CCTV monitoring)
• Project and Fit Outs (for example, fit out of new HMRC regional centres and refurbishment work to the existing HMRC estate)
• Furniture, fixtures, and equipment
• Other specialist HMRC requirements

We will explore opportunities for VCSE engagement within this category to strengthen our supply chain resilience considering changing market dynamics.

Overview of VCSEs in HMRC

The Cabinet Office’s Policy Procurement Note (PPN 11/20) define VCSEs as:

any organisation (incorporated or not) working with a social purpose. This ranges from small community-based groups/schemes, through to larger registered charities and social enterprises, public service mutuals and cooperatives that operate locally, regionally and nationally. This term is often interchangeable with the terms ‘third sector’ or ‘civil society’ organisations.

Our spend with VCSEs

HMRC’s spend data does not currently allow analysis into indirect spend data achieved with VCSEs, so only direct spend data is available.

Financial Year	Total Procurement Spend	Direct Spend with VCSEs £	Direct Spend with VCSEs %
2020/21	£2.37bn	£279k	0.012%
2021/22	£2.50bn	£299k	0.012%
2022/23	£2.52bn	£2.23m	0.088%
2023/24	£2.46bn	£1.88m	0.076%

These spend figures exclude grant funding allocated to VCSEs which is out of scope of this action plan.

Our payment performance

Government is leading by example and paying our suppliers promptly. Late payment is an issue for businesses, especially smaller businesses such as VCSEs, as it can adversely affect their cash flow and jeopardise their ability to trade. The government recognises that the public sector should set a strong example by paying promptly. The public sector is required to pay their suppliers in 30 days and report on their performance on an annual basis. 30-day terms also apply in public sector supply chains. Our department’s latest payment performance is set out below.

Latest report covering April 2024

2023-24 Quarter	Percentage of invoices paid within 5 days	Percentage of invoices paid within 30 days
1st quarter	96.08%	99.82%
2nd quarter	94.88%	99.90%
3rd quarter	92.97%	99.93%
4th quarter	93.29%	99.92%

You can read:

• HMRC’s prompt paymentstatistics
• the government’s payment policy and legislation

Barriers to participation

This section provides an overview of key barriers faced by the VCSE sector. The Perspective Economics research report provided crucial evidence-based insight into the barriers to entry and growth potential for VCSEs.

We have highlighted the key supply and demand side barriers below, as these were aspects that were factored into developing HMRC’s VCSE action plan. Throughout the year we commit to further research into understanding the causes for the barriers on both the supply and demand sides.

Please note, the barriers outlined in this section have been identified through both the systematic review of existing literature, as well as strategic engagement with 29 consultees.

Supply side barriers (VCSE supplier experience)

• VCSEs have varied capacity both to bid and deliver contracts on the scale or geographic breadth required for HMRC.

• some VCSEs are hesitant to participate with central government procurements, citing inaccessible tendering procedures and the resource required to bid

• there are a number of concerns around lack of accountability, payment, and transparency within the supply chain

Challenging digital landscape which impacts ability to access portals, to find opportunities, and to keep up with increasingly digitised services

Demand side barriers (commissioner experience)

• commissioner understanding of the VCSE sector is varied and commissioning teams will need to be upskilled to ensure consistent best practice is adopted

• contract design and management can limit the sector’s ability to engage with our procurements and services and to deliver contracts within the required scale

• VCSE visibility and identification challenges often mean it is hard for commissioners to identify which procurements could be delivered by VCSEs

• currently we have no consistent way of tracking indirect VCSE spend within our supply chains

In light of this, HMRC are focused on addressing the following barriers to entry: Commissioner awareness and understanding of VCSEs, how we can better identify opportunities that might be accessible for VCSEs, and how we can enhance our tracking of VCSE spend.

Action plan

This is the first iteration of a VCSE action plan for HMRC. The purpose and ambition of this plan is to create a foundation of best practice to be adopted and improved in the future.

Ownership of this plan sits under HMRC’s Purpose Steering Group and we will ensure effective implementation across the department by 31 March 2026 with regular monitoring of progress.

We will proactively seek and act on feedback from the VCSE sector to continuously improve our understanding of VCSEs and how we can better support the sector going forward.

This action plan is a one-year plan, which we will review and update as appropriate based on the commitments outlined below.

Actions, benefits and milestones

Action	Benefit to VCSEs	Milestones
Appointing a VCSE Workstream within HMRC’s Purpose Steering Group	Provide strategic oversight and direction on how we implement the VCSE agenda in harmony with HMRC’s wider organisational goals and objectives (including SME and Social Value)	30 May 2025
Explore ways to automate direct and indirect VCSE spend tracking within HMRC	Better visibility of our VCSE spend will allow us to develop more targeted initiatives for VCSE engagement	31 July 2025
Work with Social Enterprise UK on identifying categories within HMRC spend where VCSEs are currently underutilised	Identifying specific categories of spend with high VCSE potential will allow us to develop targeted initiatives for VCSE engagement	31 December 2025
Hold training session with commissioners to share best practice on engaging VCSEs within procurements	Improve the consistency that VCSE engagement best practice is adopted across HMRC procurements	31 January 2026
Agree future direct VCSE spend targets for financial years 2026/27 to 2027/28	Provide strategic direction for HMRC’s VCSE engagement work	31 March 2026
Regular engagement from VCSE Champion with the Government VCSE Advisory Panel	Allow HMRC to adopt VCSE engagement best practice adopted across government	Ongoing

Case studies

One area in which HMRC have had success in engaging VCSEs has been with our external research projects. External research is vital in supporting the policy partnership in developing new policies and evaluating the impact of policy changes. It can also highlight opportunities to improve performance by increasing yield, improving efficiency and making things easier for our customers. 

Between 2022 and 2024, HMRC has contracted with the National Centre for Social Research (NatCen), a VCSE specialising in delivering research services to deliver several research projects. These projects have been vital in supporting HMRC’s development and delivery of robust and relevant tax policy.

HMRC competes for our research projects via a call-off competition from CCS’s Research and Insights Dynamic Purchasing System (DPS), which has several VCSEs and SMEs registered. The tenders competed from Research and Insights DPS consist of a mixture of VCSEs, SMEs and larger organisations with over 400 suppliers registered on the DPS. NatCen were awarded their contract after their bid was determined to be the most advantageous tender against both cost and quality criteria.

One of the contracts HMRC has with engage NatCen, is for the Compliance and Debt Qualitative defined term agreement, where NatCen are engaged to deliver several research projects within the compliance and debt field over the duration of the contract.

Since contract commencement, NatCen have been responsible for delivering multiple qualitative research projects focused on compliance and debt themes, often concurrently. As part of this, NatCen have worked in close collaboration with HMRC and helped ensure successful delivery of the projects, by providing high quality work which has demonstrated their expertise in qualitative methodologies such as in-depth interviews. Across projects they have ensured that timelines and deadlines are met and maintained frequent communication with HMRC project leads.

NatCen have provided the following feedback from working on one of our contracts:

It’s been great working with HMRC on this contract. Project leads have provided clear guidance and technical topic expertise and through our regular engagement and close working relationship, we are able to exchange feedback and address any emerging issues promptly. Having worked on a range of projects across the contract, we’ve been able to take forward cross-cutting learnings from one project to another, ensuring high quality delivery.

Departmental commercial opportunities and market engagement events

Pipeline

For an up-to-date overview of our opportunities, please review the HMRC commercial pipeline which is refreshed every 6 months.

It contains a forward look until 2027 for projects and anticipated procurements valued at £2,000,000 or more.

Search and apply for contract opportunities on Find a Tender.

Joining Frameworks / Dynamic Purchasing System / Dynamic Markets

Search the Crown Commercial Service commercial agreement pipeline for upcoming agreements.

Joining a supply chain

Read more information on how to do business with HMRC.

Further resources

VCSE Business Hub

A dedicated space to help VCSEs looking to work with the government. Here you will find links to other departmental action plans and centralised guidance on bidding for government work.

VCSEs: A guide to working with government

Read this guidance document for VCSEs looking to work with central and local government.

Contracts Finder

Register with Find a Tender keep updated on new and upcoming contracts worth over £10,000 with the government and its agencies.

Public Procurement Review Service

If you have a concern you’d like to raise about the procurement process or a problem with payment on a public contract you can let us know via the Public Procurement Review Service, and they will investigate for you.

Government’s prompt payment policy

find out more about the measures introduced by the government to tackle late and unfair payment practices in the public sector click.