On September 1st, HMRC formally announced its Third-Party Tax Software and Application Programme Interface (API) strategy.
This strategy shows how HMRC plans to work more closely with software developers by releasing improved APIs. Through better APIs, third party software will be able to use the same rules and logic that HMRC services use and can be pre-populated with data. This will make tax easier for customers and help more of them get it right first time. In turn, this will allow HMRC compliance staff to focus their efforts on the minority of deliberate rule-breakers, and not the majority who are trying to do the right thing.
The Financial Secretary to the Treasury, David Gauke, said:
“The API strategy recognises that it is important to work collaboratively with developers of tax software to help deliver high quality digital services for businesses and agents up and down the country.”
Mark Dearnley, HMRC’s Chief Digital and Information Officer, said:
“Our vision is to provide software developers with better and richer APIs that will enable them to innovate and bring more sophisticated software products to the market.”
BASDA has been involved in meetings with HMRC behind the scenes and Steve Checkley of TaxCalc and Chair of the BASDA Accountants in Practice forum talked to Accountingweb this week:
“It’s certainly a step in the right direction for us. If you think about software as we know it, it’s a one-way process. You fill out a tax return and then send it to HMRC.”
Checkley is most excited about the “pre-population” of data in HMRC portals. “The idea with the digital tax account is that HMRC will gather this information and third party software will be able to pull that information out of the tax account and straight into the software. It will help the practitioner by making our respective software products more efficient,” said Checkley.
HMRC will share more details at their Developer Conference on Monday 7th September.