THOUGHT MAIN STORY LEADERSHIP
to tax data could leave businesses vulnerable to compliance failures, fraud and reputational damage.
Introducing a new legislative framework as significant as the Joint and Several Liability policy requires a modernised digital system that’ s fit for purpose. That means leveraging AI, providing access to real-time tax data and developing a suite of publicly available APIs to enable recruitment businesses to remain compliant, reduce risk and meet their tax liabilities efficiently and confidently.
Currently, recruitment businesses have limited access to real-time information about the status of tax liabilities within their supply chain. Without direct access to this data, companies rely on third-party advisors or manual processes that are time-consuming, error prone and easy to manipulate. This also means added costs somewhere within the chain which will be felt by all those involved.
Furthermore, the lack of inbound mechanisms to access the wider dataset held by HMRC, alongside the fast-paced nature of recruitment, where transactions happen frequently and across multiple clients, is leaving businesses unable to confirm tax compliance in real-time. As a result, they are at risk of inadvertently failing to comply with their new obligations, potentially leading to major financial and reputational consequences.
Only by making essential tax information more accessible and instant can the recruitment sector accurately verify their tax liabilities and meet their regulatory obligations. There is a clear mismatch between the stronger compliance HMRC now requires and the limited digital tools available to deliver it. As such, the focus should now turn to equipping businesses with the capabilities and functionality they need to achieve it.
The solution: Modernise, integrate, simplify
There is clear demand from the sector for digital compliance tools which we believe should provide API-driven access to tax data, automated real-time auditing capabilities and integration into existing payroll and back office systems.
Modernising in this way will provide faster checks, reduced fraud and stronger trust and compliance in the labour supply chain.
We are calling for a clear and immediate solution – extend HMRC’ s existing Real Time Information( RTI) platform with two simple yet transformative APIs.
1. Employer liability verification API
Using a PAYE scheme reference, UTR number and VAT number, recruitment businesses could securely verify, in real-time, whether their suppliers or partners have outstanding liabilities for a specific tax period, without revealing sensitive financial details. In other words, HMRC should create an API that allows software providers to
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