TaxCalc Blog

Pre-population of Self Assessment Tax Returns Using HMRC APIs

As you may have heard in recent announcements, such as the one from our CEO Tracy Ebdon Poole Making Tax Digital for Business has been delayed. However, the ability for information to be automatically populated in a Self Assessment tax return is still pressing on. 

Having first written about this in early 2016, we thought it was time to update our customers as to the progress of this.

What is MTD for SA?

As part of HMRC’s digitisation strategy, they have developed a number of Application Programming Interfaces, or APIs for short, that are capable of downloading data already held by HMRC into third party software to aid in the completion of a tax returns.

The available data includes:

• End of year payroll information (P60, P11D)
• NI contributions, primarily to assist in the calculation of Class 4 NI
• Election to transfer Marriage Allowance

APIs are nothing new in TaxCalc. In fact, we use them extensively in TaxCalc to carry out various actions such as filing a tax return over the Internet.

How do the APIs work?

Once released, where data can be retrieved from HMRC, TaxCalc will gain new ‘Fetch’ buttons. When you click the button, you’ll start a process to obtain the client data (or your own data if using TaxCalc Individual 6).

As part of this process, HMRC require you to authorise your installed software to access this data. To begin, you’ll enter your Government Gateway user ID and password into a window that looks remarkably like a GOV UK web page (which it actually is, being built into TaxCalc). The second step is then to go through HMRC’s Two Step Verification, which will use a mobile phone, landline or mobile phone app to receive a pass code.

Once the data is obtained directly from HMRC, TaxCalc will present the information and populate the relevant boxes on the tax return.

Note that you should only need to authorise your TaxCalc software once every 18 months[i].

When will the APIs be released?

The APIs are currently in a private beta with HMRC, which means we are testing our implementation of the APIs with our own beta testers. During their development, we have provided a lot of feedback to HMRC, which has helped to shape the way HMRC have brought them to life.

Two of the APIs have been released although we haven’t yet turned them on in the software. These are the NI and election to transfer the marriage allowance APIs. I’ll explain why we haven’t turned them on in a moment.

With regard to payroll information, data for taxpayers will be available for those registered for Self Assessment. However, it transpires that HMRC are still processing this data, and it may not be available (or correct) for some taxpayers until September.  When their reconciliation process is completed.

Likewise, although TaxCalc can obtain a figure for Class 2 NI due to HMRC, HMRC cannot provide a Class 1 NI value until the taxpayer’s employments have been processed. This could lead to an incorrect Class 4 NI calculation.

We therefore think it’s best to err on the side of caution and release the APIs when we are told that all employments are processed and data should be complete.

And as for the election to transfer marriage allowance? This is a little used tax break, so to turn on such an important and large piece of user interface for such a small snippet of tax data seems like overkill!

The Fetch feature will really come into its own once the majority of the APIs are functioning and functioning well.

[i] If you are a practice customer that runs multiple standalone copies of TaxCalc, each will need authorising individually. This doesn’t apply to network or CloudConnect installations. If you would like to migrate from multiple standalone installations to either a network version or CloudConnect, please call our Sales team on 0345 5190 883.