In early September, the UK’s Revenue and Customs Agency, HMRC, released a detailed API strategy aimed at helping tax software developers integrate directly with the British tax office. The move goes beyond a straightforward transactional API where tax software could submit a client’s tax returns from within their application, and instead seeks to provide a range of APIs with business logic embedded so that the software can identify errors in real-time and provide appropriate guidance for correct completion of tax returns as they are inputted. The move aims to reduce compliance errors, improve the tax experience for citizen and agent, and promote the development of new products and market entrants into the UK finance sector.
In the first public strategy of its kind, HMRC has published a detailed API strategy and roadmap. According to Dr Ade Adewunmi, Digital Strategy Advisor of the UK Government Digital Service, who spoke at this year’s Code for America Summit, the UK’s overall government Digital Strategy is focused on delivery, strategy and trust. To engender trust, says Adewunmi, “We set and then enforce an agreed way of doing what works.” Clearly, HMRC is aspiring to be a leader in implementing the UK Government’s Digital Strategy, aligning closely with the principles outlined by Adewunmi and her team.
Five Components of the HMRC API Strategy
HMRC has released a detailed API Strategy which articulates five key components:
“Our aim is to enable businesses, agents and individuals to do all of their tax transactions online, either through one of our digital accounts or by using a third-party software product of their choice,” said Mark Dearnley, chief digital and information officer in a recent blog post in the Tax Journal.
This means building trust by letting users know the current status of the agency, describing the roadmap, and setting standards in developer documentation and what the agency is calling “integrated APIs”. The strategy describes how they plan to move from their current state of transactional APIs (which already power 800 million transactions with the tax department each year) to optimized APIs. At present, HMRC is on the road to developing integrated APIs, which allow tax citizens and agents to carry out a number of transactional processes at once through software that integrates with HMRC’s API catalog. Once this creates a seamless in-app experience for end users, the agency will move on to developing optimized APIs which can extend business processes by integrating with the tax office across business applications as needed during supply chain workflows.
To achieve their strategic goals, HMRC is seeking to optimize the performance of APIs by creating several tools to help third party developers have confidence in the government’s API releases. In addition, these tools will help a program of continual optimization by helping developers identify production challenges and share their experiences with the Department. Two of the key tools to be provided on the API platform will be the capability to test the APIs in live environments and providing performance dashboards publicly. Such tools are emerging as best practice amongst API providers. Salesforce, for example, has built a whole subdomain — trust.salesforce.com— to communicate performance issues to their developer community.
Behind HMRC’s strategy is the economic goal of stimulating market growth by enabling smaller developers to enter the tax software market, and allowing established players to diversify their product offerings. Measuring the number of registered developers and the products they create with the APIs are key metrics for HMRC’s success, alongside tracking the number of new intermediaries who enter the market to build niche products that integrate with tax processes.
Based on lean principles, the goal of the HMRC is to deliver a minimum viable product quickly and then iterate to expand on the capabilities and services provided on their API platform.
Transparency and open collaboration are at the core of the HMRC strategic approach. This has already included a third party developer conference that was hosted shortly after the release of the strategy. over 100 developers attended, with delegates identifying a humber of key interest areas:
- Availability of webhooks and callback mechanisms
- Managing tokenization between sandbox and production environments
- Moving existing APIs from XML to JSON format, and
- Providing granular detail on progress to engaged developers.
Already, the department has committed to responding to the XML to JSON request within the next four weeks, and developers are encouraged to email the team. Following the event, a teleconference was then held with 49 developers, with another scheduled on 12 October. A schedule of API releases based on developer feedback will then be published as part of the roadmap. Other developer engagement strategies include webinars, private beta testing programs, and webchat and virtual assistant services.
Signs of Transparency in Government API Strategies
By raising the bar on key developer engagement principles such as trust and transparency, HMRC is moving the field forward to a point where government’s could conceivably offer service level agreements (SLAs) to enable commercial and NGO users to integrate APIs into their workflows and products with confidence. Certainly, the commitment to enabling a testing environment for production APIs and commitment to status and performance reporting is the step before committing to a service agreement. The HMRC’s whole strategy is based on giving third party software providers greater confidence in embedding the government’s APIs directly into their products.