Tax Faculty members and newswire readers will be well aware of the problems with HMRC’s new Trust Registration Service (TRS), particularly for agents. See our recent news item Latest information on the Agent Services Account and the Trust Registration Service
We have just been told by HMRC that the 5 October deadline for registering trusts has been extended to 5 January 2018.
This deadline applies to the reporting of complex estates and new trusts with a tax consequence for the first time in 2016/17. The original deadline was 5 October 2017 in line with the s7, Taxes Management Act 1970 requirement to give notice of liability to tax within six months of the end of the tax year. As it became clear that the TRS would not be available until much later than was originally planned – it was in fact available to agents from 17 October – the 5 October deadline was moved to 5 December. It has now been moved again, to 5 January.
The TRS is the government’s response to the Fourth Money Laundering Directive and it has had many teething problems which are still ongoing as reported in our last news item on the subject.
We are pleased the deadline has been extended for new trusts and complex estates but extremely disappointed that the 31 January 2018 deadline for existing trusts remains. Many firms have not registered for an Agent Services Account, a necessary precursor to using the TRS. This could be because they are unable to register (due to HMRC issues) or because they have concerns about the confidentiality of clients details, on which HMRC has been unable to give reassurances. So there is very little time remaining to register existing trusts.
We still think HMRC has underestimated how long it will take to register each trust and we will continue to press for an extension to the 31 January deadline. Many of our members are telling us that a soft landing on penalties is not good enough as clients will expect deadlines to be met whether there is a penalty or not.