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HMRC presents API vision to software industry

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9th Sep 2015
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HMRC hosted the Business Application Software Developers’ Association (BASDA) in London yesterday to officially launch its new application program interface (API) strategy.

HMRC is pursuing this more open approach to boost the development of third party tax applications. “It’s something we’ve been lobbying for, for a long time,” said Kevin Hart, chairman of BASDA and Sage UK’s strategic relationship manager.

“I’ve had the privilege of working with BASDA for eight years and that’s been on the agenda ever since I started.”

The changes have been widely welcomed in the software industry. FreeAgent’s founder and chief executive Ed Molyneux told AccountingWEB previously that HMRC’s strategy would “lower the barriers” for people wanting to build interesting tax software.

Hart expects there will be a number of key services HMRC will step back from delivering itself, a shift that was reflected in the recently announced plan to retire the current corporation tax (CT) online filing form.

“It’s hard to justify investment in innovation in areas where you’re still competing with HMRC head on,” said Hart.

According to Hart, the new strategy will take years to deploy. The first APIs will be available to developers in a test environment from November onwards. “There’ll be a phased rollout. It’ll not be all the APIs to start with,” said Hart. “It’s what they call a sandbox test environment.”

Some commentators see the new API strategy as a nod towards the emerging market for cloud add-ons. Hart is not one of them. “The API strategy is for all, it’s down to the speed by which those different providers can capitalise on it,” he said.

“That may be a fair point in a world where you can only do one release a year and you’re constrained by your release cycle. But there are those desktop software offerings that have much more agile delivery timeframes. I think it’s also down to those who seize the opportunity.”

Despite his overall positivity, Hart admits he is very eager to see more detail from HMRC on the evolution of self assessment and the proposed online personal tax account.

“SA is quite a monumental area in itself and even when there are changes in the existing form, that’s pretty intensive work. So a wholesale replacement, from a technology point of view, we’d need to be very comfortable that it’s really robust,” he said.

“There’s also more work to be done on the security protocols,” he added.

Overall, Hart is expecting the new strategy to foster significant changes in the tax system. “PAYE went through a major transformation with RTI,” said Hart. “And really, the new API strategy is creating the foundation to be able to the same thing with other taxes. I can envision there being some significant changes to things like VAT, for example.”

He also cautioned that there will be growing pains. “That’s always the case when you stage such transformational projects, but the gains should be big enough to justify the effort”.

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