The provision of data by companies engaging with self-employed individuals for an Income Tax in-year calculation pilot

HM Revenue and Customs (HMRC) is designing a proof of concept to test whether we can provide a significantly better in-year tax calculator for income tax and National Insurance Contributions for our self-employed and other self-assessment customers. To deliver this, the proof of concept seeks to ingest more real-time taxpayer data from third parties. This would enable HMRC to build better functionality into our future services. This could enable customers who want to manage their cash flow by paying their tax more frequently to do so by providing the necessary tools. The In-year Calculation Proof of Concept (IYC PoC), a unique collaboration opportunity, aims to: • ingest real-time/close to real-time data from multiple sources, inc. intermediaries (building out from the data schema in the OECD Model Rules for Reporting by Digital Platform Operators XML Schema) • enable HMRC to calculate and forecast accurately or nearly-accurately in-year tax liability for ITSA customers using that data • model technical challenges and ultimately shape the design of future Timely Payment policy and improve ITSA customer experience. HMRC issued a PIN on a pro-bono basis for the IYC PoC in July 2022, the results however did not meet our needs. Funding has now been secured to support intermediary engagement and we intend to cover intermediary participation costs.  The objective of this PIN is not to award a contract at this stage, but to gain external market input on the feasibility of our data requirements and to inform our future procurement approach. Dependent on responses received to this PIN the expectation is a formal procurement exercise will commence from February 2023. It is then HMRC's intention to work with selected intermediary or intermediaries, that can share their user data for the IYC PoC and participate in shaping our future model for an in-year calculator and future payment policy. • For the purposes of this IYC PoC, an intermediary is a business/company that knows the nature of a payment and the amount paid to their users for services their user provides.

Detailed data requirements will be provided upon registration to the eSourcing event, however high level requirements include: • real-time or close to real-time income data on or before payment is initiated to the self-employed individual, • customer designatory information (e.g. name, address, DOB, tax identifier (if held)) to enable matching with individual records held by HMRC, • data sets covering customer income from, e.g. digital, and non-digital platforms offering accommodation, transport, courier services, or other personal services through their own platforms, and data from franchisors (e.g. fast food restaurants), such as income details held for franchisees.

Please see the additional information at Section5 of this notice for further information and details on how to access the RfI

Additional information: The detailed PIN also contains wider requirements relating to: System, Security and Data Format, Data Population, Data Reporting Frequency, Data Consent and Data Users.

Potential benefits for intermediaries involved in the IYC PoC include: • using the IYC PoC to generate first-hand feedback from their users on the effectiveness of in-year tax calculations and insight into whether this makes intermediary services more appealing • gaining first-mover advantage by being at the forefront of HMRC's innovation on using real-time/close to real-time data to achieve in-year tax calculations • supporting the critical thinking necessary to shape the method of ingesting live data into HMRC • as set out above, funding has been secured to support intermediary engagement. Potential benefits for intermediary users involved in the IYC PoC include: • greater insight and understanding of their in-year tax liability and, • a reduced risk of non-compliance through increased automation, e.g. income pre-population, therefore, • making tax admin and compliance less daunting for users who could have been deterred from working through an intermediary due to its perceived complexity.

If successful, the selected intermediary/ies will:  

provide data to HMRC,  

enable HMRC to build and test functionality to ingest real-time or close to real-time intermediary data, and    

support testing the HMRC calculators' ability to generate accurate or near accurate in-year income tax liability using intermediary data in real-time.  

Interested intermediaries should follow the instructions at Section 5. On receipt of an expression of interest, submissions will be assessed on their scale and scope, ability to provide the data required and availability to co-design intermediary and interface requirements.

Full details of the PoC are held in an eSourcing RfI using the HMRC SAP Ariba eSourcing tool. Please ensure you are registered with the HMRC SAP Ariba to gain access to the documentation (Guidance on how to register is provided as an attachment).

When you have obtained 'your organization's account ID' number, please email [email protected] and copy in [email protected] with your account ID number. Once you have complied with the foregoing you will receive an e-mail confirming access to the RfI. Further information about HMRC's procurement tool SAP Ariba, a Suppliers Guide and general information about supplying to HMRC is available on the HMRC website: www.hmrc.gov.uk/about/supplying.htm If you have already registered on SAP Ariba then you may also need to re-register on HMRC's SAP Ariba in order to be added to the event.