HMRC provided the update below on 4 January. We understand that the paper data capture process for “digitally excluded agents” (typically solicitors with only occasional interaction on paper with HMRC in the past) was to expire on 5 January. Such firms will now have to await the “solution in early January”.
"We recognise and appreciate the frustration experienced by some within the trust and agent community and apologise for the delay in providing agents with access to the TRS and the other technical difficulties encountered. We have listened to stakeholder feedback and where possible made a number of improvements to help make the customer journey smoother. To mention a few of our changes:
- extending the 5 October 2017 deadline for the registration of new trusts to 5 January 2018;
- announcing our decision not to apply penalties to existing trusts registered after 31 January 2018, but before 5 March 2018;
- revising our guidance around the use of class to describe beneficiaries;
- making it possible to register when details such as National Insurance Number, date of birth and address of a settlor or beneficiary are unknown; and,
- allowing agents to use the 'save and come back later' button to save a partially completed registration for up to 28 days.
We are aware of the technical problems experienced on 19 and 20 December 2017. We resolved this swiftly and the TRS was up and running again in the evening of 20 December 2017.
Turning to your substantive points and questions.
Process for agents that currently have no digital access to the TRS
As mentioned in my email of 20 December 2017, the new Agent Services account is being delivered in an iterative way and whilst the majority of agencies have successfully registered we recognise a small number of users who have no/insufficient HMRC digital footprint have not been able to access the TRS. We hope to have a solution in early January 2018. Information on how to be set up as an Agent can be found at GOV.UK
In the interim, the process that should be followed by these agents who currently have no access to the digital TRS is as follows:
For Existing Trusts
Agents of existing trusts (that do not require SA registration or are already SA registered) can register after the 31 January 2018 deadline but before 5 March 2018 and we will not impose a penalty. We advise that these agents should wait until they have digital access to the TRS in early January and then submit their registration by online.
For New Trusts
For agents of new trusts (that incurred income tax or capital gains tax liability for the first time in 2016-17) and have no/insufficient HMRC digital footprint the Trusts and Estates helpline will issue a paper Data Capture Sheet. We will then manually process the paper returns upon receipt, both enabling TRS registration and allowing us to provide a UTR so that agents can proceed with submitting their client’s SA tax return. We will take a reasoned and proportionate approach to penalties where the customer or agent have not been able to register on the TRS solely due to technical issues but have done so as soon as reasonably possible.
Timescales for Trust SA returns
I can confirm that your understanding is correct; if trustees, or an agent acting on behalf of trustees, file their SA return within 3 months of receiving a UTR then no penalties will be incurred. If the tax return is, however, filed later than 3 months after receipt of the UTR then a penalty will be applied. Nevertheless, the payment of any tax owed for 2016-17 will need to be submitted no later than 31 January 2018 or a penalty charge will be applied.
Extending the 5 January 2018 registration deadline
We have already extended the registration deadline from 5 October 2017 to 5 January 2018. Given the vast majority of the agent community have had access to the TRS since October 2017 and taking into account the relatively small numbers of trusts requiring a UTR, we do not consider there to be sufficient grounds to merit a further extension to the deadline as to do so would put the collection of public funds at risk.
HMRC have publicised the existence of the TRS to customers and wider stakeholders through a number and range of communication methods, such as its Trusts and Estates quarterly newsletter, and in meetings with professional and representative bodies. I attach a link to our December 2017 newsletter for you to cascade to your members. We have also placed a reminder under question 20 of the Trust and Estate return."
CIOT and ATT are continuing to engage with HMRC on access to and operation of the TRS.