Press Release: Tax bodies call for a soft landing for new Trust Registration requirement

Tax professionals have welcomed HMRC’s announcement that they are extending the deadline for registering trusts for self-assessment until January 5 2018. Now the Association of Taxation Technicians (ATT) and the Chartered Institute of Taxation (CIOT) are calling for a soft landing on penalties, as agents continue to face problems and delays accessing the new Trust Registration Service (TRS). 

New anti-money laundering regulations introduced in June 2017 require trusts liable to certain taxes1 to retain written records of the individuals involved in the creation and running of the trust, as well as those that can benefit.2 A large amount of personal detail for each of these parties must be reported to HMRC for inclusion on a new Trust Register via the TRS. The register will not be accessible to the public, but will be accessible to a number of law enforcement agencies and is part of a global drive to enhance transparency.

Trustees have until 31 January 2018 to register reportable trusts on the new Trust Register but agents, who look after the vast majority of trusts, are still experiencing difficulties with the new system. The TRS became available to agents on 17 October 2017, but is only accessible to them once they have obtained a new Agent Services account. This is a new online service for professional tax agents which HMRC have been developing as part of the wider Making Tax Digital programme, and is still only at a pilot stage.   

HMRC announced on 8 November 2017 they would extend a separate, earlier deadline of 5 October 2017, which applied to trusts who needed to register via the TRS for self-assessment in 2016-17, to 5 January 2018. This followed correspondence between the ATT/CIOT and HMRC3 (and other professional bodies) and previous calls for more time to comply with the new requirements.4 However, the deadline of 31 January 2018 still applies to a much larger group of trusts. 

Yvette Nunn, Co-chair of ATT’s Technical Steering Group, said:

“While we very much welcome the further extension of the deadline for trusts that need to register earlier for self-assessment, it still leaves agents faced with an obligation to register large numbers of trusts during their busiest months in the run up to the self-assessment deadline.5

“Agents have been required to sign up to the new Agent Services account before it is fully available and, with only limited guidance available on the new system. Agents are finding it difficult to meet an already stretching deadline.”

John Cullinane, CIOT Tax Policy Director, said:

“Confirmation from HMRC that they would be willing to allow agents more time to comply with significant new obligations, or at least guarantee no penalties would be charged for registrations prior to, say, 5 April 2018, would be beneficial to both agents and HMRC. It would allow HMRC more time to prepare the important new Agent Services accounts fully before large volumes of agents sign up, and demonstrate a real understanding of the pressures agents are under during the self-assessment season. 

“Our members want to comply with the new rules, and guide their clients accordingly but the current 31 January 2018 deadline is simply not achievable.” 

Notes for editors

1The relevant taxes are income tax, capital gains tax, stamp duty land tax, land and buildings transaction tax (Scotland), inheritance tax and stamp duty reserve tax. 

2The individuals who need to be reported on the register are the trust’s beneficial owners.  This term includes the settlor(s) who created the trust, the trustees who manage it, beneficiaries of the trust and any person who can control the trust.

3The joint ATT/CIOT letter to HMRC can be found here and the reply from HMRC here.

4ATT has previously issued a press release calling for more time here

5HMRC statistics for previous years show that up to 43 per cent of returns have been submitted in January.  Given that there are over 11 million returns issued, this means 4-4.5 million returns are filed in this month alone. 

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