Call for evidence outcome

Business Systems Integration — Summary of responses

Updated 28 October 2026

1. Introduction

Digitalisation offers businesses significant opportunities to streamline their operations and minimise time spent on administration. Most use a range of digital systems alongside their accounting software, including platforms to process payments, manage bookings, and track stock. They also use software or business bank accounts to manage their finances and tax obligations. In many cases, however, these systems do not connect, and data must be transferred manually between them. This takes time and increases scope for errors.

Business systems integration refers to the automatic transfer of data between these systems, enabling financial records to update in real time and reducing the need for manual entry. Systems integration, by reducing administrative burdens, can help provide businesses with more real-time, accurate financial information. It could:

• save businesses time by reducing manual data transfer
• help businesses see real-time financial information to manage cashflow and support timely payments
• make it easier for businesses to do their taxes and reduce errors in tax returns
• make it easier for tax advisers to support their clients and focus on real-time insights and advice

The integrations considered in this call for evidence relate to connections within a business’ own systems and do not involve data being shared with HM Revenue and Customs (HMRC).

At Budget 2025, the government announced a commitment to hold a call for evidence on business systems integration. This call for evidence sought to understand how widely systems integration is used, what is preventing wider adoption, and what government and industry could do to make better connected systems more accessible. This work sits within the government’s broader ambition to boost economic growth and productivity and simplify tax administration. It sits alongside initiatives such as Making Tax Digital, e-invoicing, and the Department for Business, Innovation, Science and Trade’s Plan for Small and Medium sized businesses. Business systems integration is a part of this agenda, enabling businesses to reduce administrative effort and improve the quality of their financial information. The call for evidence was open from 12 March 2026 to 4 June 2026. This document summarises the responses received.

The government wishes to thank those who took the time to respond and engage with the call for evidence. These contributions have significantly strengthened understanding of how systems integration works in practice and the barriers faced by businesses.

2. Responses

Overview

The government invited evidence on how businesses use digital record keeping and systems integration. We asked whether stakeholders identified any benefits, challenges or barriers associated with systems integration, and how the availability and accessibility of systems integration could be improved to benefit small businesses.

There were 63 written responses in total, from businesses (primarily in the retail and hospitality sectors), software providers (including both individual developers and larger firms), tax advisers, professional representative bodies and individuals. 19 live sessions were conducted with stakeholders, including one-to-one discussions and roundtables.

Summary

Responses show that business systems integration can deliver clear benefits where it is used, including reduced manual data entry, improved accuracy, and better visibility of financial information. However, uptake remains limited. While many respondents highlighted efficiency gains, others reported that systems integration can introduce complexity and ongoing maintenance burdens, with limited perceived value for very small businesses where costs outweigh benefits.

The evidence suggests that fragmented systems, commercial incentives, and adoption barriers combine to limit systems integration at scale. Three consistent themes recurred:

• the benefits of systems integration, such as efficiency and accuracy (Section 3)
• a lack of standardisation across the technical ecosystem, in terms of software products being designed to integrate smoothly (Section 4)
• a lack of support for adoption of systems integrations (Section 5)

These themes are interdependent. Fragmentation across systems increases the cost and complexity of systems integration, particularly where connections are built on a one-to-one basis and rely on inconsistent interfaces, data formats, and authentication approaches. Higher costs, combined with vendor lock-in and uncertainty around value, reduce adoption of systems integrations. Low adoption of systems integrations in turn weakens incentives for providers to prioritise interoperability.

Respondents consistently identified cost, including the costs of implementation, training, and ongoing subscription fees, as the most significant barrier to integrating their digital systems. Technical challenges, including closed or inconsistent interfaces, further limit the ease with which systems can be connected. Limited awareness of available options, reliance on provider-led guidance, and concerns around data privacy and control also reduce confidence in adopting systems integration.

Taken together, this indicates that systems integration delivers strong outcomes in some cases but is not yet widely accessible or adopted across the business population.

Theme 1: benefits of systems integration

Respondents who had successfully integrated their systems reported significant efficiency and accuracy gains. These included reduced manual data entry, fewer errors in financial records and improved access to real-time financial information. Systems integration was frequently described as replacing fragmented processes with a more consistent and reliable flow of data across systems.

In many cases the benefits of systems integration were measurable. Businesses reported saving several hours per week on administrative tasks, as well as material reductions in error rates. Evidence from software providers also showed that automated processes can reduce routine tasks from minutes to seconds, with these benefits increasing as volumes grow.

While most respondents highlighted the benefits of systems integration, some respondents questioned the need for systems integration, citing concerns about added complexity and limited expected benefits. Some representative bodies also noted that systems integration would be a low priority for businesses already facing broader digitisation challenges.

Respondents also highlighted wider operational benefits. These included improved cashflow visibility, more timely decision making, and stronger financial control. Systems integration enables businesses to operate from a single source of truth, reducing duplication and increasing confidence in the accuracy of financial data. Some respondents also noted that systems integration allows compliance checks to be embedded more directly into normal workflows.

However, these benefits are not being realised consistently. Businesses able to derive most benefit tend to have greater technical capability, access to specialist support, or operate in environments where systems integration is already more developed.

For example, several software developers highlighted that businesses with the most to gain from integration, such as sole traders, micro-businesses and small and medium-sized enterprises (SMEs) without dedicated finance teams are often the least equipped to deal with the complexity involved. It was also noted that many SMEs lacked the combination of technical and business expertise needed to implement integrations confidently, making integrations seem inaccessible or high-risk.

This creates a clear gap between what is technically possible and what is achievable in practice, particularly for smaller firms without the capability, time, or support to implement systems integrations.

To help SMEs realise the benefits of adopting digital technologies, the government is implementing the recommendations from the SME Digital Adoption Taskforce, including local SME digital adoption pilots and partnerships with industry to provide new support and address challenges such as digital skills gaps.

As announced at Budget 2025, the government will require VAT invoices to be issued as e-invoices from 1 April 2029. The implementation roadmap, published at Budget 2026 — sets out the decisions, legislation, standards, guidance and readiness activity needed to support the move to mandatory e-invoicing. E-invoicing can reduce manual processing and errors, support faster payments and improve the accuracy of business records and tax returns. Government will continue working with businesses, representative bodies and software providers on the detailed design and implementation of the regime.

Theme 2: fragmentation across the technical ecosystem

A key barrier identified across the current systems integration landscape was the lack of common data standards, which limits interoperability between systems and requires extensive custom development to enable systems integration. The consequence is that there may be few or no integrations available between certain business systems and accounting software.

Respondents highlighted that systems are often designed using different data structures and formats, and that it is difficult to connect systems that are not inherently built to do so. It was also noted that, while software providers often store data in broadly similar ways, the specific data models and structures used are frequently considered commercially sensitive or proprietary which can create barriers to interoperability between systems.

Accounting software typically requires standardised formats and controls, while other business systems often use specialised or proprietary data models. This makes mapping and maintaining consistent data across systems resource intensive.

These challenges are further complicated when interfaces, such as Application Programming Interfaces (APIs), are closed, inconsistent, poorly documented, or unavailable. This makes it harder for systems to exchange data and services reliably, creating barriers for businesses and developers trying to connect different systems and reducing interoperability in practice.

Respondents also identified difficulties in consistently identifying and matching businesses across systems. The absence of a consistent Unique Business Identifier (UBI) or comparable approach makes it difficult to link records reliably. As a result, integrations can become fragile and may require manual intervention to maintain accuracy.

Taken together, these factors contribute to a fragmented technical landscape, where systems integration is not designed as a default capability, and where interoperability between systems remains difficult to achieve in practice.

There was broad agreement that greater standardisation would enable more reliable and efficient business systems integration, reducing duplication and saving time for businesses. Respondents cited frameworks such as the European Minimum Interoperability Mechanisms (MIMs) and Sweden’s Standard Import Export (SIE) framework as examples of established good practice, noting their potential to provide a strong foundation for improving interoperability within the UK. However, respondents emphasised that standards alone would not be sufficient without consistent implementation and appropriate access to data across systems, and it was noted by one respondent that the success of common frameworks would depend on businesses being able to access and use relevant system data easily and at a reasonable cost.

Theme 3: barriers to adoption

Uptake of systems integration remains low according to most respondents, even where solutions exist. The evidence suggests this is driven less by technical capability and more by cost, awareness, confidence and how businesses engage with digital systems.

Cost of software was the most frequently cited barrier. This includes upfront implementation costs, ongoing subscription fees, and the cost of switching systems once established. Respondents emphasised that switching can be disruptive, requiring significant time to transfer and validate data. This creates inertia, even where better integrated solutions are available.

Awareness is also a significant factor. Many businesses are not actively considering systems integration and may not fully understand what it involves or the benefits it can deliver. Businesses often select systems based on immediate operational needs, with systems integration considered only later. This can limit future flexibility and reinforce fragmentation over time.

While smaller businesses cited limited time and capacity to research and implement integration solutions, some stakeholders highlighted that larger businesses may also be resistant to change due to company culture and legacy systems, limiting adoption from both sides.

Respondents highlighted the role of information and advice. Guidance is often provided by software providers and may not be perceived as independent. This can make it difficult for businesses to assess options or identify solutions that meet their needs.

Concerns about data privacy, security, and control were raised across responses. These concerns extended beyond technical risk to broader issues of trust, including uncertainty about how data is shared and who has visibility of it. In some cases, respondents expressed concern that systems integration could reduce control over sensitive financial information.

Some businesses reported that systems integrations did not always function reliably, for example by failing to transfer data accurately. Some respondents suggested this may reflect technical issues, such as unstable connections or APIs, while others attributed this to user error arising from limited implementation support.

Evidence suggests that these barriers persist even among digitally capable businesses. Low uptake cannot be explained by a lack of technical ability alone, indicating that behavioural and market factors are significant constraints, even where systems integration is available and businesses are digitally capable. Some respondents, such as some software developers, felt that systems integration was accessible even for businesses with limited technical capability, and that low awareness was the primary barrier to uptake.

Finally, respondents noted that systems integration is not appropriate for all businesses. For those with low transaction volumes, the cost and effort may outweigh the benefits. This reinforces the importance of a targeted approach rather than assuming universal adoption.

Taken together, these findings indicate that improving outcomes will require addressing both structural barriers in the market and the practical challenges businesses face in adopting systems integration.

3. Next steps

The government does not intend to introduce requirements for businesses to integrate their systems. Any action will focus on supporting businesses and improving the conditions under which systems integration can develop. This approach reflects the consensus amongst respondents on the benefits of systems integration, while acknowledging the range of barriers that businesses currently face in adopting it.

The evidence points to 2 areas where targeted action can make a practical difference: improving interoperability across the technical ecosystem, and strengthening support for adoption of systems integrations. The government intends to begin work on both areas in 2026, starting with a small, focused exercise to test what works in practice. This reflects the need to build evidence and momentum while avoiding the risks associated with large-scale, upfront interventions.

The government recognises that businesses, and in particular small and micro businesses, face barriers to adopting and integrating digital systems, including: lack of information, the upfront cost of investment, limited time and capacity, and skills gaps. Businesses also express concerns around cybersecurity, and modifying existing business processes. On standardisation, the government’s first step will be to bring together industry to identify a limited number of priority areas where greater consistency would deliver the greatest benefit. This will involve working with small, medium and micro-businesses, software providers, business representatives, and technical experts to define a practical and deliverable starting point. Focusing initially on a small number of use cases will enable progress to be demonstrated by identifying where the greatest benefits can be realised and barriers can be addressed. This will help to provide evidence to inform future scaling.

The government will then develop a plan on how to support better business systems integration, with a particular focus on supporting small and micro-businesses in a way that reflects their needs and experiences. This plan will form part of our work to deliver the recommendations of the SME Digital Adoption Taskforce, addressing barriers to digital adoption and helping businesses access and implement digital tools. It will establish clear objectives, delivery arrangements and measures of success (such as rates of sustained adoption and time saved), ensuring that support is informed by direct engagement with businesses and focused on reducing administrative burdens, improving cash flow, boosting productivity and supporting business growth.

Government’s initial focus will be on improving access to clear, independent information and advice for businesses, and affordable skills support. Businesses should be able to understand whether systems integration is right for them, what it involves, and how to get started, and how to implement smoothly, even with limited resources and without relying solely on commercially driven guidance. The government will work with trusted intermediaries, including the accountancy profession and other advisers, to support this.

This approach reflects a learn-by-doing model. Rather than seeking to design a comprehensive solution upfront, the government will start with targeted interventions, test what works, and build on that evidence over time.

The government will set out further detail in due course and welcomes continued engagement as this work develops. If you would like to discuss this work further or share additional views, please email integrationcallforevidence@hmrc.gov.uk.

Annex: List of stakeholders consulted

AI-Priori Ltd

APILayer

Association of Chartered Certified Accountants

Azets UK

Bar Oh Limited

BDO

CES Accountants

Charlie Matthews Consulting

Clarumedia

Cliènta

Code Poets Limited

Country Land and Business Association

Co-Worker Online Ltd

CW Business Group Limited

Cynare

Enrolpay

Federation of Small Businesses

Focused On Data Limited

Free Enterprise Group

Freightcode

Fresh Financial Group Limited

Honest Invoices

Institute of Chartered Accountants in England and Wales

Institute of Chartered Accountants of Scotland

Kingdom Impact

Law Society of Scotland

PCI Pal UK Limited

Rosey IT Limited

Runox Technologies Limited

Snowflake Online Store LTD

Sticky Connections

Symmetry Ltd

Systematics Software Ltd

The Company That Counts Ltd

T-Mining NV

Veryfi

Xero