Identity Assurance: What you need to know
With Identity Assurance (IDA) set to launch in 2015, TaxCalc commercial director Steve Checkley gave the lowdown at Accountex on what it is and how it could affect practitioners and their clients. Rachael Power reports.
Speaking at the tax theatre during this year’s Accountex exhibition, Checkley updated attendees on IDA’s progress.
“There has been little published on IDA by HMRC, despite it being less than 12 months to the introduction date,” he said. As a pan-governmental policy, Checkley said his presentation was based on publications issued by the government and research he had carried out while working with colleagues at the Business Application Software Developer Association (BASDA) on the government’s digital and online strategies.
For those who may not be familiar with the concept. IDA is a new method that will allow agents, taxpayers and businesses to file returns and make other online submissions using government systems. Based on third party services, IDA will verify the identity of the user through a submission and verification process to reduce online fraud.
IDA is already in being tested by a small group of invited users, in which UK employees are notifying HMRC of benefits-in-kind. A wider phase of "public" beta testing is expected to take place later in the year.
Checkley explained that the push by the government toward IDA could see the end of the Government Gateway by 2016-17. Instead, taxpayers and individuals will be able to access government services online directly, using identities provided by private sector organsiations. HMRC will not store personal data about you or your business. Instead, five organisations will be able to provide you with an online account, including:
- The Post Office
Eventually, the UK government hopes that banks and other organisations holding personal data will join the initiative, he added.
Under IDA, firms’ current methods of filing online is going to change. This means that sometime between 2015 and the end of the Government Gateway, accountants will need to get an online account with an identity provider and acquire new filing credentials with HMRC.
Checkley explained how a "responsible officer" will need to apply for new credentials that will be used during the filing process. They need to be personally and independently validated, which also requires the use of an identity provider. The ID provider will ask questions which only you know the answer to.
IDA and practices
TaxCalc's product chief explained that IDA could bring a number of changes and potential admin burdens to accounting practices. Under the proposed system, any staff member who files returns or makes online submissions will need to be identified and maybe even personally validated under the scheme.
There are also implications under IDA for practice software, which will need to identify individual users. At the moment,users only need to enter their Government Gateway credentials once and they’re ready to use the software.
Checkley said this arrangement makes it relatively easy to steal and use a login without the owner’s knowledge. Under IDA, any submission made to the government such as a self assessment return will require authentication.
“The question facing HMRC is how often must software be authenticated?” he asked.
“BASDA is pushing for once a year, but the worst case scenario is that it’s required every time a submission is being made, which will be a nightmare for January.”
And if responsible officers can only authenticate the software, firms will need to consider how the software will be deployed.
Distributed systems can be authenticated once, and all users can make an authentication. But for standalone systems, each installation will need an authentication in turn.
IDA and clients
IDA could lead to the demise of the 64-8, the agent authorisation form, according to Checkley. IDA may usher in a more formalised process for verifying the client-accountant relationship. That would require HMRC either to migrate existing 64-8s to the new system, or start all over again.
Starting again would weed out old or fraudulent records but could take longer. “On the flipside, there would be a positive, being it would mean HMRC effectively performed the anti money laundering check for users, as a third party will have to vet a client before allowing them to confirm the relationship within the Revenue’s system.
Checkley urged accountants to learn as much as they can about IDA, so they can explain the system to clients ahead of the impending 2015 go-live date.
More information can be found at www.gov.uk/transformation