Charlie Carne reports on the Agent Talking Points webinar discussing HMRC's API strategy and delivery plans. Although initially sceptical, Carne was pleasantly surprised by the webinar's presenter, Lee Hawksworth, who discussed HMRC’s role in building APIs.
Hawksworth is the head of software development collaboration in HMRC's Digital Service Team. He started by explaining that an API (application programming interface) defines the standards by which two systems communicate and exchange data.
How HMRC uses APIs
The API is effectively a language tool enabling communication between the two systems. In this case, the two systems that we're interested in are those of HMRC and that of third parties whose tax software we agents rely on to upload tax returns or PAYE data under RTI, etc. and via which we, in turn, will be able to access all our clients' data held by HMRC.
Lee said that HMRC has been building such APIs for 17 years. Currently over 75% of the data filed with HMRC is obtained via these APIs and very little of what is filed comes from HMRC's own applications.
The future role of APIs
For this reason, HMRC is keen to encourage and stimulate third party software development. They (rightly, in my opinion) recognise that commercial software houses are much better at developing these tools than HMRC themselves and that HMRC's role should be focused on building as many APIs as possible to enable much better collaboration with taxpayers and their advisers.
His explanation was thorough and he seemed genuinely to recognise the need for HMRC to open up their systems as widely and as soon as possible.
Lee went on to explain how his team have built up close relationships with a number of developers (no names were mentioned, but presumably most of those products with which AccountingWEB members are familiar feature strongly amongst that list). He gave an example of how such collaboration works when designing tools for digitising the 64-8 process.
Two step verification: APIs in action
Our third-party software will call an API from HMRC and start the authentication process via the existing Government Gateway user ID and password. This, in turn, issues an access code for two-factor authentication (2FA - sometimes called two-step verification 2SV). At the moment, this relies on a text message being sent to the agent containing a code to be input as verification.
However, in future, other options will be available, including (but not limited to) an app that is being developed by HMRC. At this point, I tried to ask via the webinar chat screen why they don't simply use existing and very reputable 2FA options, such as Duo Mobile. But, unfortunately, they weren't willing to take questions.
Each time the software requires access to a new piece of information from HMRC, the user has the power to grant or deny that access and, once granted, it can be revoked at any time. I was reassured that we will always remain in control of what data our software can access.
How HMRC relies on the agent community
The key thing that they are working on at the moment is to greatly expand the number of items that can be delivered to our software, as each of those items requires its own, unique API, whether that is a client's date of birth or income from a previous employment, etc.
Lee went on to emphasise how much they rely on the agent community to let them know what services would be valuable and, to that end, encouraged us to let them know what API services they would like to be delivered and what sort of processes we would like to see accessed via an API.
There was recognition that it is a waste of time for agents to provide HMRC with data that they already hold and that HMRC should make it easy to feed that information back to us seamlessly via APIs.
This was one of the better HMRC webinars that I have attended and it was refreshing to be updated by someone who clearly knew their subject. However, it would have helped if the support team for this webinar were equally up to speed, as too many of the questions that they filtered through to Lee to answer had either already been dealt with during his presentation or were too specific to be of general interest.
I'd encourage HMRC to put forward more of their team leaders to update the agent community about its direction (and speed) of travel. This was certainly a good start from which I learned a lot about their strategy.