Software developer collaboration

Making Tax Digital for Business

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Lee Hawksworth

HMRC

Chief Digital Information Officer

Digital

Lee is HMRC’s Head of Software

Developer Collaboration. His teams

support 75% of HMRC’s 1.7 billion

digital transactions which are

completed through an API using a third

party software product.

Lee’s current role is right at the heart of

HMRC’s Transformation Programme,

delivering and operationalising HMRC’s

Third Party Tax Software and API

Strategy.

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Objectives

• Provide an update on HMRC’s Digital transformation and API Strategy

• Explain how we’d like to engage with the software industry and what the industry can do for us

• To provide you with an updated position on MTDfB, including the policy, legislation and delivery

• To discuss how we can work together to make MTDfB successful for you and the people you represent

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Our vision is to promote API First strategy

that allow them to integrate with HMRC

providing third party software developers

with better and richer APIs

• to bring new and

more sophisticated

software products

to the market

• to generate greater

competition in the

software industry

resulting in more

choice for customers

• to help HMRC meet

key objectives

✓ maximising revenue

✓ improving customer

experience

✓ minimising costs

API First Strategy published 1 September 2015

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API strategy

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Enabling third party software developers to build

great services provides many benefits

The ability to tailor services for those who use them

means:

Third party software developers can focus on

making great products for their customers,

such as agents/accountants

HMRC can focus on developing APIs and

specific web services where these are needed

Customers want an integrated experience

between software they already use and HMRC

APIs are the best way to achieve this

APIs driving improved tax and business software

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API First

approach

Community of

700 software

developers

Ongoing support to

existing services

(PAYE, CT etc.)

20 products

using new

APIs in live

7 OGDs

54 million

API calls

since Apr 17

Partners with

40 developers

in pilots

Collaborative working to

exploit future opportunities

(CDS, Brexit, MTD etc.)

Digital Delivery Centres

• We have 6 digital centres spread across the UK

• The DDC at Shipley (from 2020 Leeds) is dedicated to the ongoing support of software developers.

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Operating model

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Third party software provider

API developer hub – Sandbox (External Test)

• Sandbox is a ‘playground’ allowing developers to sign up, test APIs

• Doesn’t link to ‘back end’ systems so a safe environment

• Recent enhancements to Sandbox include the ability to create a test user

• User Research is underway now to identify further journey improvements for developers.

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API Developer Hub - Production

• Houses live APIs and supporting documentation

• Anyone can access, see developer.service.hmrc.gov.uk/api-documentation

• Without registering you can still explore some documentation

• Private beta developers can access ‘private’ API

• To use private APIs you have to be whitelisted.

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API documentation• Once developers have access, the hub contains all the documentation needed to build software

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What’s in the API pipeline

Currently 60 APIs either in sandbox, production or planning. Among the headlines:

• CT API – allows new companies to register for Corporation Tax

• MTD SA – currently allows individuals to provide data relating to self employment and

Income from Property, more end points to come

• MTD VAT – allows business to send VAT data

• MTD CT – allows business to send Corporation Tax data

• SA pre-pop – APIs get NI summary/ tax year details, Individual Benefits, Individual

Employment, Individual Income, Individual Tax

• PAYE Settlement Agreements – submit PSA data, trigger charge

• ePAYE API – view employer’s PAYE data (as shown in Business Tax Account

• Create test user – allows developers to create a test user in sandbox environment

(unique because this API will never go into production).

The API pipeline will be published in the deliver hub shortly.

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What does engagement with the software industry look like?

We’re committed to building strong partnerships. We need you to come with us on our Digital journey - it’s the key to success!

To support the foundation for that partnership we’ve introduced Terms of Collaboration which:

• are a ‘code of practice’, they are not intended to be contractual

• provide a framework of standards for developers to work to

• were published on Gov.UK 19th July (Alpha version)

• will be published in the developer hub (shorter ‘hub friendly’ version)

• were drafted with input from developers/ key stakeholders

• were issued to developers/ BASDA ahead of publication

We will need new developers to sign up to the terms as part of the developer hub registration process.

We will ask existing developers to sign up retrospectively.

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What does engagement with the software industry look like?

• Creation of a cross-cutting, senior, high-level steering group whose collective ‘voice’ can:

- influence policy and strategy

- contribute to solution design

- troubleshoot issues

• Re-invigorate the BASDA/ IREEN/ BCS (BIB) group (PAYE)

• Provide continuous engagement and conversation through attendance at BASDA and other rep body forums such as

ICAEW

• Expansion of Digital Customer Relationship Management team to develop long-term, collaborative, sustainable

relationships with the industry, representing ‘voice of the developer’ to internal HMRC stakeholders.

• Continuous improvement and expansion of the developer hub to become a ‘one stop shop’ for developer needs

• Continued operational/ technical support from the Software Developer Support Team (SDST)

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What do you think?

We’d welcome your feedback and suggestions on future engagement plans.

Email us at the SDST mailbox

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Making Tax Digital for Business:The view from the bridge!

• Outline of MTDfB provisions

• Phased approach

• Insights from the pilot

• Working with the software industry

• Helping your clients prepare

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Ted Comerford

Legislation

• Written Ministerial Statement in July 2017 announced that the pace of mandationwill be slowed:

• VAT mandated April 2019 (above VAT threshold only)

• Voluntary option for smallest businesses to join MTDfB

• Scope will not be widened before 2020

• MTDfB legislation will be introduced in the upcoming Finance Bill

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Making Tax Digital for Business: Why change?

• Government listened to concerns from businesses, professional bodies and Treasury Select Committee about pace of change

• New timetable enables small businesses and landlords to move to digital at a pace right for them

• The changes will ensure smooth transition to a digital tax system

• It’s a marathon not a sprint!

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2 million small

businesses use

accounting or

filing software

HMRC provided 1.1 million

small business customers

in 2014/15 with digital

assistance

Why MTDfB?

• It will help customers get their tax right first time and significantly reduce the amount of tax lost through error

• It’s how customers increasingly expect to do business – not just with HMRC

• The technology will allow tax to be integrated into business records, meaning ‘doing tax’ will be easier and more convenient

• Widespread agreement that digitisation is the next, natural step

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How?

• HMRC will provide the Application Programme Interfaces (APIs), but it won’t be offering its own software solution

• Instead, software developers will provide a range of accounting packages and record-keeping apps to enable businesses to keep their records digitally

• HMRC is working with software developers to enable apps and software to link safely and securely to HMRC systems, which is covered by a publicly available Terms of Collaboration

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How?

• Free software will be available for income tax for businesses with the most straightforward tax affairs

• HMRC will share some of its risk rules with software developers to help spot anomalies, giving businesses a chance to correct any errors before information is sent to HMRC

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May 2016 ITSA

Private Beta

launched

Autumn 2017 ITSA Public Beta / ongoing pilot

ITSA

VAT

CT

April 2016 April 2017 April 2018 April 2019 April 2020

Autumn/Winter 2017/18

VAT Technical

Private Beta

April 2019Vat Service

Go Live (for those

>VAT threshold)

April 2020 Potential

mandationfor some/all

of ITSA

April 2017 ITSA CGL launched

April 2020 Potential

mandation(for <VAT threshold)

Spring 2018VAT

Public Beta

Timings for CT to be confirmed

Now -October

2017 Design, Policy,

Legislation

April 2020 Potential mandation

for CT

When?

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What have we delivered?

Since April 2017 we have been conducting a live pilot with a controlled group of users. The services available through the pilot are:

• A web service to allow customers to sign-up to MTDfB

• A suite of APIs allowing software developers to provide customers, via their software, with the ability to submit data related to Self Employment and/or income from UK property to HMRC and receive a calculation of emerging tax liability

• A web service allowing Agents to subscribe to Agent Services, be assigned an agent’s reference number and then map this to their existing agent’s reference to access services through their third party software

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What have we delivered?

And;

• Access controls for income tax and MTDfB to ensure a client’s data can only be accessed and updated by an appropriately authorised agent

• A web service allowing an Agent to subscribe their client to MTDfB

• A suite of APIs allowing agents to submit the same data to HMRC as their clients can

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• Trade media

• GOV.UK

• Partnership communications materials

• Digital communications and support

• Events and engagement opportunities

Income Tax pilot

• Targeting all eligible businesses and their agents to encourage voluntary take-up in a proportionate way

• Work with partners to achieve this, particularly professional and representative bodies, software developers and other public sector organisations

• Prioritise agents, new businesses and VAT customers

• Demonstrate the progress and benefits of MTDfB to the broadest audience

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What's next for businesses and landlords?

We have created an API roadmap which gives a detailed view of the forward look

for delivery. Some of the high-level deliveries coming up are:

• Functionality for customers to provide data on Emigration, Change of

Circumstances, Class 2 NICs, Class 4 NICs and 3 Line Accounts.

oAPIs will be available to test in September 2017 and will be live in November

2017

• Functionality for customers to provide data on amending their update.

oAPIs will be available to test in October 2017 and will be live in December 2017

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What’s next for Agents?

Some of the high-level deliveries coming up between now and Spring 2018, for agents

are:

• A new client authorising an agent for MTDfB on their behalf

• A client confirming authorisation of an agent through their Digital Tax Account

• De-authorisation by an agent or client

• Agent access to register a client’s new self-employed business with HMRC and sign them up to MTDfB

• Multiple agent authorisation per client’s tax regime, with different authorisation levels

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Example screen

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What businesses do now What businesses will do under

MTD

• Keep records in a range of ways, including

on paper

• Keep digital records using software or app

(option to use excel if it links to MTDfB

enabled software)

• 99% file their VAT returns online, mainly on

a quarterly basis (either directly or through

an accountant)

• Although many keep digital records, the

vast majority calculate their VAT separately

and submit their VAT returns using free

HMRC product

• Alternative arrangements for the digitally

excluded

• Generate and send quarterly updates -

same 9 boxes of information as VAT return

- direct from digital records

• Software can interact with agent software

to allow them to check/send updates

• Alternative arrangements for the digitally

excluded (follows current definition)

VAT – at a glance

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Subscribe to MTD for VAT web service deliveredAll APIs released into Live

Spring 2018

Agent Authorisation for VAT API available in Test

Get Obligations and Change of Circumstances APIs available in

Test

Autumn 2017

Add transaction monitoring to APIs

Make a Payment reminders delivered

View and Amend previously submitted data in Test

9 Box submission and Declaration APIs available in

Test

Public Beta begins

Gov.uk Guidance available

Winter 2017 / early 2018

Technical private beta begins

Controlled go-live begins

VAT road map?

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• Full campaign activity

• Direct communications

• National and trade media

• GOV.UK

• Partnership communications

• Digital communications

• Events and engagement opportunities

Preparing for VAT

• Campaign activity to drive awareness of mandation obligations for VAT businesses –starts with the launch of the VAT pilot

• Partner with professional and representative bodies and software developers to promote the pilot and the benefits of making the switch to digital

• Sign-post appropriate guidance, help and support for businesses, agents and stakeholders

• Continue to promote ITSA service

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Preparing for MTDfB

Think about

• Signing up to the developer hub for whitelisting

• Volunteering for our private beta pilots

• Clients software needs and the services you can offer

• Start to integrate your product with the APIs

• Engaging with HMRC to discuss development needs

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UK leaving

the

European

Union

Voluntary take-up

of MTDfBFinance

Bill

Things to watch

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Thank you

HMRC Customer Readiness and Stakeholder Team

makingtaxdigital.mailbox@hmrc.gsi.gov.uk

More info on MTD:

https://www.gov.uk/government/publications/making-tax-digital

Making Tax Digital for Business

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