MTD Pilot: Tax return pre-population data released

API
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Matt Bailey
Founder
Aegia Cloud Systems (Gbooks)
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While there has been much talk about the additional burdens of MTD, one aspect that will help accountants is the planned availability of taxpayer data direct from HMRC’s system.

Agents will be able to click a button and download PAYE information held for that taxpayer, and this can then be dropped straight into a client’s tax return. Five new API data feeds have been part of HMRC’s MTD testing program (see my other blog here), and these services should be rolled out over the next few weeks.

What data will be available?

The details of the five new feeds are shown below:

  1. Individual employment - a simple list of the taxpayer’s employments during the tax year, with employer name and PAYE tax reference.

  2. Individual income - pay from each source of PAYE employment, plus income totals from private pensions, incapacity benefit and jobseeker’s allowance.
  3. Individual benefits - any benefit-in-kind data reported to HMRC (on P11Ds) for each employment.
  4. Individual tax - tax deducted at source from each source of employment income, plus totals deducted from private pensions and Incapacity Benefit.
  5. National Insurance - if a taxpayer has income from both employment and self-employment, this API returns the total earnings for Class 1 NIC purposes and details of any Class 2 NICs due.

In addition the existing marriage allowance API, first launched in October 2016, will still be available. This states whether the taxpayer is currently claiming the marriage allowance (either as transferor or recipient), and whether he or she is eligible to make a claim for the tax year.

How can these feeds help me?

The five new API feeds provide information to pre-populate areas of a tax return. Your software provider can stitch together data from the various APIs to create near-complete employment pages. The feeds also provide the information required on private pensions, incapacity benefit and jobseeker’s allowance on the main SA100 form. It should be easier to obtain this data direct from HMRC than from the client, and its accuracy makes enquiries (and possible penalties) less likely.

How do accountants access the data?

HMRC has introduced a two-step verification process to access the data feeds. The agent is initially redirected to a login page and asked to enter their Gateway ID and password. They will then be asked to set up a second tier of security, and can choose for login codes to be sent either to a landline, a mobile phone or a verification app such as Google Authenticator or Authy.

Once this set-up is complete, and a code received and entered, the agent can authorise the software to access the specific data feed. This authorisation will last for eighteen months, far longer than the ten hours previously used for the marriage allowance API. The authorisation allows access to data for all clients for which the agent has an appropriate 64-8 in place.

When will the data be available?

The new data will not be immediately available on 6th April each year. Most of the information comes from the PAYE system, and this data is only complete once end-of-year submissions have been made. The final deadline (for P11D data) is 6th July, and some employers may submit figures after the deadlines have passed.

It also takes time for HMRC to reconcile the PAYE data and make the information available to the MTD system. This process will only start on 6th June, and there is a limit to how many records that can be reconciled per week. If HMRC is expecting a P11D the system will hold off from reconciling the taxpayer’s records until after this deadline has passed, and in some cases may need to run a second reconciliation if further data is received.

So this combination of reporting lags, plus the large volume of data to process, means the full API dataset will only be available a few months after the end of the tax year. HMRC is reluctant to say exactly when, but presumably most of the data will be available by August following the end of each tax year.

So when will the new feeds be launched?

HMRC is starting a “controlled-go-live” rollout of the five new pre-population feeds, with this scheduled to start in the next fortnight. Initially data will only be available for years prior to 2016/17, but information for the most recent year will be added over the coming months.

So it should all be available and fully functional in time for the busy season - but let’s not worry about that quite yet.

About Matt Bailey

matt_bailey

Founder of Aegia Cloud Systems (Gbooks), the leading cloud-based tax and accounts system.

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19th Apr 2017 15:02

I notice no mention of CIS tax deductions. HMRC are still way behind on giving Accountants the information they really require, although this will help, especially with the aging population.

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19th Apr 2017 15:26

2 factor authentication will be the deal breaker for many.

I am employed, I do not have a company mobile phone, all incoming calls go through to reception. This effectively rules out all three verification options.

Meanwhile, I'm tax manager with overall responsibility for the tax affairs of all our clients.

And it's not like we are a backwater company. City centre ICAEW regulated.

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to SteLacca
20th Apr 2017 10:41

You only have to do it once every 18 months, or when you add a new service..... not every time you log in or want to use it.

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By JGCCA
to mattoldfield
20th Apr 2017 10:47

Take that and multiply it by 300+ clients and that's a large chunk of your time sunk into admin calls...

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to JGCCA
20th Apr 2017 11:16

You should only need to authenticate your main reference which then covers all clients for whom you have a 64-8? I have just rolled forward our tax software to 2017 and have only authenticated once and it covers all, including all staff members.

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to JGCCA
20th Apr 2017 14:29

JGCCA wrote:

Take that and multiply it by 300+ clients and that's a large chunk of your time sunk into admin calls...

Absolutely irrelivent how many clients you have, 1 or 1000, its once 18 months via your software.

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to JGCCA
20th Apr 2017 14:29

JGCCA wrote:

Take that and multiply it by 300+ clients and that's a large chunk of your time sunk into admin calls...

Absolutely irrelevant how many clients you have, 1 or 1000, its once 18 months via your software.

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to SteLacca
20th Apr 2017 13:05

I don't think it has to be a company mobile phone - don't you have a personal one? As far as I'm aware, it only needs to be a number / physical device you control that can receive SMS messages.

Passwords are broken - partly by technology and mostly by human behaviour - and totally insecure for sensitive data / sensitive systems.

I 100% support HMRC prioritising keeping my data private and secure over pandering to people who find 2 factor authentication too much of a hassle.

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to andyscotland
21st Apr 2017 08:44

Of course I have a personal mobile phone. However, HMRC will retain details of said phone for future use. If I leave for any reason, die, retire etc. That's going to cause issues.

If HMRC want a secure system, there's nothing to stop them using 2FA with email. I see no reason why it has to be phone, and only phone.

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19th Apr 2017 15:33

1 and a half cheers

This sort of data ought to be freely available to agents, not just via APIs but on the normal log ins.

it is however much, much, much too slow if we have to wait until September to see it, that means we will already have ideally completed half our tax returns.

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By tom123
19th Apr 2017 16:46

I must be being thick (and, granted, this is not my line of work) - but, with RTI, what is this 'reconciliation' that is being done:

What is it that is being compared to what?

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to tom123
23rd Apr 2017 11:36

A point well made. Aside from the original comment being inaccurate, perhaps they reconcile the data received to "expectations" and then when that differs they conclude that, in the absence of any other meaningful comparative source, that they should go with the original received data! All along giving themselves comfort that they have taken all possible steps to validate the data.
If anyone is being thick; it certainly is not you.

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By Gideon
20th Apr 2017 09:19

Why isn't the NI available anyway, rather than just if the client has self employment and employment income? The number of cases last year where HMRC said the individual hadn't ever registered for class 2 was ridiculous, and in many cases we had copy paperwork on the files showing they must've registered.

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20th Apr 2017 10:24

Would be great if HMRC would finally allow agents access to CIS data for sub-contractors.
It is often a pain to get correct info on CIS deductions from client and HMRC discloses this only if requested in writing. And even then it takes them 4-6 weeks to reply.

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20th Apr 2017 10:39

So can I get this right... much of the prepopulation will only be available post summer hols but as ireallyshouldknowthis says - most of our returns will be completed by then so waste of everyone's time.
Also SteLacca's comment is a worry
I presume we wont have to load a number every time we go one? unlike logging on to banks?

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to JAADAMS
20th Apr 2017 10:44

JAADAMS wrote:

I presume we wont have to load a number every time we go one? unlike logging on to banks?

Once every 18 months, or whenever you add a new service. NOT every time you want to use it.

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20th Apr 2017 10:44

It seems that the only way for most firms to use this is to provide a cheap basic additional mobile phone for each relevant user, just for this purpose.

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to leon0001
21st Apr 2017 08:57

One per firm, not one per user....

Once every 18 months.....

Not worth buying a phone for that!

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20th Apr 2017 10:51

It appears that the API data feeds will provide totals for income and tax deducted from all private pensions, and not the individual amounts for each pension (if more than one pension is received).

According to the Notes for the 2017 Tax Return, the following information still needs to be entered in the "Any other information" section on page 7 for each pension:

• details of your pension or annuity payer and
your reference number
• your PAYE reference
• the payment before tax and the amount of tax
taken off

So doesn't this mean that the P60s will be required anyway (if the Tax Return is to be completed in accordance with the HMRC guidance)?

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20th Apr 2017 10:52

I was speaking to Iris about this. They had been under the impression that the API data would be released mid-April and it was only after they released their April 2017 software that HMRC said the API data won't be released until after the P11D deadline. HMRC should be held to account.
The 2016-17 RTI window closed yesterday so HMRC has all employment data. P11Ds have no impact on that, nor MA, nor C2NICs so surely HMRC can switch on those APIs now. What excuse has HMRC for holding back?

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20th Apr 2017 10:53

And how accurate will the information be? At the moment, I often see people receiving erroneous tax refunds based solely from PAYE income (often a year or two later and out of the blue) - because their other income hasn't been taken into account!
The PAYE doesn't seem to be able to link to people's self employed records.

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20th Apr 2017 10:54

If the API data is not going to be available until after 6 July then that is 30% of the filing window gone.

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20th Apr 2017 11:05

Extract above
'Agents will be able to click a button and download PAYE information held for that taxpayer,'

At the moment that currently only takes 1 phone caal.

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to AndrewV12
20th Apr 2017 11:49

Agree with above! We simply ring HMRC if we don't have the P60s. Unless this new system is going to take less time AND be 100% accurate, think I'll stick with asking clients for their P60s and only trusting HMRC where necessary.

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to northernmonkey
20th Apr 2017 15:42

I disagree - if it worked simply pressing a button and getting P60, MA, C2NIC info will be much quicker than a phone call - and quicker than manual input into the software. The problem is (a) the data isn't going to be released for another 3 months and (b) it could be as inaccurate as HMRC's C2NIC data for 2015-16 .

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to kevinringer
20th Apr 2017 17:01

You'll note I said AND be 100% accurate. I didn't mention which would be quicker - just which I would prefer based on the current mess HMRC make with getting things right.

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to AndrewV12
21st Apr 2017 14:54

But they have now said they wont give it to us over the phone from 01/05/17, and will instead send it in writing to the client if we request it!

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20th Apr 2017 11:48

All very good - but for many of those employed our responsibility is to check to ensure that the clients tax is correct, not accept any old $hit the Revenue produce.

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By SXGuy
20th Apr 2017 14:02

So basically it's another service we won't bother to use.

I don't know about you but our clients actually like to know their tax position around the same time as their year end. We would hope that they already have p60s or at the very least month12/week52 payslips to hand. Who in their right mind is going to wait until July before they inform their client of the overall tax position when we could have done in already and filed their self assessment.

And as someone said if we don't know the answer it only takes 1 phone call so again, why wait 2 months to complete the work.

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20th Apr 2017 14:23

The header shows .................''....one aspect that will help accountants........''
I can't wait to see the other aspects.

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20th Apr 2017 15:11

Has it been clarified what happens if the prepopulated data is wrong? ie can it be over written/ignored?

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to zoe brown
20th Apr 2017 15:44

In PTP it can be overwritten, but if we do over-write it HMRC will "correct" it in exactly the same way HMRC ignored our C2NIC figures for 2015-16 and over-wrote it with their own incorrect figures.

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20th Apr 2017 15:11

Has it been clarified what happens if the prepopulated data is wrong? ie can it be over written/ignored?

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20th Apr 2017 15:11

Has it been clarified what happens if the prepopulated data is wrong? ie can it be over written/ignored?

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By SteveRA
20th Apr 2017 15:21

'The agent can authorise the software to access the data feed"
Not sure what software you are referring to. I use Taxfiler for most clients and still use the HMRC online system for about 15 very straight forward clients but happy to shift everyone to Taxfiler.
Are you including Taxfiler in your reference to software?

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20th Apr 2017 16:23

i listened to the agent webinar last week re the new set up arrangements , i doubt that the suggestion of a mobile phone for everybody is any use and all agents even multi office firms only have one access code so how its all going to work in practice i am not sure HMRC seem to be tho

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20th Apr 2017 18:27

I know we are all saying that we wont be using the service as waste of time/late etc but if you stand back and look at it it is much more worrying - if HMRC dont appreciate the practicalities of such a basic proposal and they've not advised the software providers accurately or in time this is another indication as to how bad the implementation of MTD will be.
I really dont get it... surely there must be someone working in HMRC who used to work outside and will appreciate the difficulties not least in the mobile phone problem?

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21st Apr 2017 06:22

Hmmmm so under MTD the window to submit quarterly data is a month for clients in year and HMRC will make theirs available 6 months after the year end....

So if MTD is about helping people understand what their tax liability is how will someone who is self employed and has, say a pension, know in year?

Why the delay for P60 data? The final FPS will have been 5th April at the latest as anyone paid after that is into a new year. The EPS all done comes in on the 19th - for most employers its just a confirmation they're finished and for the rest it updates statutory reclaims etc. HMRC are happy with returns done from P60s so what's the difference? If there may be a P11D yes we wait but if not we should have the data.

Agree same with CIS and NIC they have the data.

If the data were available sooner there would be less of us ringing and asking.

Is this a confession that they are not pressing companies to do RTI properly?

What happens in September when the data is rolled out and it disagrees with our submitted returns? Will we get a heap of SA302 copies that are telling clients we got their tax returns wrong? Are they going to withhold repayments until they can match the records?

As ever the nearer we get the more worrying this sounds particularly in terms of certainty for clients.

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21st Apr 2017 08:33

Following on from coolmandwithabeard's comment - he's summarised the problem in one comment. But could the delay in the data be because they think there by that date all the EYU will be in?
Yet again something that the Institutes should go back to HMRC and advise of practicalities... but I guess not.

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21st Apr 2017 08:50

There is no need to hold back on all APIs just because the P11D deadline is 6 July. Take for example MA. Most elections for 2016-17 would have been in place before 06/04/16 so the MA API would have been useful if it was working way back then. The time limit for applying for MA is 4 years so the data is just as likely to change on say the 6 August as it would on 6 July. There is no reason at all to hold back on MA. Same for C2NICs - they're nothing to do with P11Ds.

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21st Apr 2017 09:10

As has already been said - all this info is available on the final payslip anyway or clients P60.
"This process will only start on 6th June, and there is a limit to how many records that can be reconciled per week" so how will HMRC issue their 'batches' - issue per company? If per company I should imagine they will start with the FTSE 100 first with the smaller firms being left to last.
Lion0001 suggests for the bigger firms to provide cheap phone. I thought this was to save time and money? I trust those bigger firms that will have to bear the (large) cost will get together and be up in arms but even if they do the technology is obviously in place HMRC's side.
"It should be easier to obtain this data direct from HMRC than from the client" - my clients know to give me the P60 or last payslip.

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21st Apr 2017 09:36

Has any of this news been the subject of any negotiation? Any consultation before ?
Do any of you believe that this will happen?
Has anyone read the SMALL PRINT as the devil will be in there !
FYI - yesterday the State Pension feeds were totally incorrect for the 3 clients I looked at!

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to taxbakbristol
21st Apr 2017 09:40

...and if you submit a different figure HMRC will correct it to theirs ...

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By taxinfo
21st Apr 2017 13:19

Zoe Brown and coolmanwithbeard mention errors. Yes, if you correct inaccurate prepopulated information HMRC will revert to the original figures.

So far as I can find out the ONLY way to fix an error will be go back to the originator of the figures and get THEM to correct it. Then, I suppose, the correction will filter its way through to the prepopulated details. Eventually.

Wonderful.....especially if you are up against one of the many deadlines and need to get something filed.

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21st Apr 2017 14:28

Possible future addition to Rebecca's list? I am just updating some text on Trusts and there was a consultation document issued on 15 March 2017 (closed 12 April 2017).
You probably know that there is to be a new Register of Trusts as from July similar in content as the PSC. The consultation text reads:
"HMRC and law enforcement will, for the first time, be able to draw links between all parties related to an asset in a trust. HMRC will also be able to compare the Unique Taxpayer References and/or National Insurance Numbers of the parties to a trust and factor these into its wider understanding of those persons’ tax liabilities. This will be particularly important in the longer term as part of the implementation of HMRC’s digital strategy.
For example, when HMRC can see that a payment out of a trust and a payment to an individual are both the same payment, it will be better able to ensure that the right amount of tax is paid at the right stage of the process."
>> nothing more is said and nothing is specifically said about prepopulation but you can see where this is going.

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21st Apr 2017 15:57

Well now if the current inability to register 64-8s in timely fashion is anything to go by.......
It seems to me that there is a generic inability within HM Government departments to constructively install and run major IT programs, across the board. Helicopters sitting in the garage for ten years springs to mind
The recent NHS schemes are an example.
This week's reported "Screw-up" on the new emergency 999 system.
Perhaps it is time for HM Goverment to set up an independent enquiry into how these things are done.
So far as I am aware; There are a number of IT-expert and or well-aware persons /organisations involved in the trial MTD process, but very few jobbing accountants. I would guess that the number of genuine small traders and or self-employed may be counted on the fingers of Admiral Nelson's right arm.
I have a high standard. A person known to me, designed and supervised the installation of a sytem at a well known Major Public School. Every one of the approximately 900 pupils was allocated a PC, together with the necessary central servers and what-have-you. It was installed on time and to budget. When switched on, it worked first time, without any glitches. We have need of him. Sadly the Master of the Universe decided he had more urgent need, so my friend died at an early age.
I draw my colleagues' attention to our collective experience of builders. We all know the ancient ruse of builders to quote one price and somehow come up half-way through with "Necessary" extras or "Variations". I make an educated guess that most of you will have noticed that builders, collectively, in any area seem to instinctively know which lost souls they may pull this trick on. You may be one yourself, I am. It seems to me that this applies particularly in the area of HM Government contracts, and particularly regarding IT.
If only some brave minister would one time say, "F*** off" that is the price and time you quoted, if you cannot do it, tough luck". It might cost on the first project, but by Jiminy it would put a rocket up the ar** of the other suppliers happily selling IT snake oil and promising the IT philosopher's stone, to HMG

Thanks (2)
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21st Apr 2017 16:47

And besides which, what is so clever about this preliminary stuff?
It is all about straightforward PAYE related income. It only applies, maybe, to 5% of my clients. For 5% of clients by the time for ITR purposes I may need information, I may, if required, simply apply for a form 302. Only a small percentage of mainstream"PAYE" persons are accountants' clients.
For the x million self-employed with the x plus million MTD-affected landlords, it is irrelevant.
My personal opinion is that landlords will seek to recover this cost from their rental income.
I, with similar clients, most certainly will seek to recover this "Small" £two or £three hundred per annum MTD cost on my one house.

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22nd Apr 2017 06:20

This is just a facility to save typing into boxes on the tax return. You don't have to use it. I think it is useful, especially for clients with many employments (it includes the payeref and company name).

If you choose not to use it and type into the return or use it then amend, the Hmrc won't "correct it"

Regarding class 2 ni - for which there is no box on the tax return, it will give your software a chance to warn you when you are completing a return where you expect class 2 but the Hmrc have not registered the notification of se status.

On a negative, I am not convinced the two stage authentication is only every 18 months.

I also get the impression the delay is mainly for this year because it is a new service.

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to daveforbes
22nd Apr 2017 07:54

Are you saying that HMRC will not amend where the return has different figures to theirs?

Currently they do with both State Pension and Class 2 NIC the latter requiring me to spend time getting them to update their systems and advise the client about an over repayment ...

Surely this will lead to more aspect enquiries or will they just accept whatever is on the return ?

If the tax return is being scrapped eventually will there be a capability for us to use a different figure if we don't like what they have?

Sorry I know you may not have all the answers but my original comment about amendments was based on current experience and you seem to know that something will change?

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By JMT21
22nd Apr 2017 15:39

I received an email from Gbooks earlier to say they've added the new data feeds to their personal tax returns. They say the data is only available for prior years but with 2016/17 data to follow as and when it becomes available.

Interesting times.

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