The additional funding comes amid wider cuts to the core spending of the Cabinet Office of 25 per cent.
Digitising services, such as filing tax returns, has already saved as much as £1.7bn last year and £3.56bn over the last three years.
The Cabinet Office's Government Digital Services department works across government, using digital technology to improve services and save money. Improvements include launching the ability to register to vote online and creating gov.uk, bringing together all government department websites and publications in one place.
It's understood the majority of the new cash will go towards HMRC, with the goal of making all tax account management online by 2019. "We're going to build one of the most digitally advanced tax systems in the world," the chancellor said during his Autumn Statement today.