11 December 2017
Under new anti-money laundering legislation that came into effect this year, HMRC is required to maintain a register of ‘taxable relevant trusts’ and the potential beneficiaries of those trusts. It was decided that the easiest way to deal with this was online and that the new system could take the place of HMRC’s existing paper procedures covering the notification of new trusts and the issuing of new tax references. That sounded very sensible, but as is often the way with HMRC IT projects it all seems to have gone wrong…
In April HMRC withdrew their paper forms and announced that their new Trusts Registration Service (TRS) would be launched in June. Two deadlines would apply – 5 October 2017 for registering new trusts (the same deadline that had applied under the paper system) and 31 January 2018 for registering existing trusts. The launch duly took place (just a few weeks late) but without access for the main users; professional advisers. That access was promised for October and in view of this the 5 October deadline for registering new trusts was moved back to 5 December. When access was finally given, however, there were significant issues with the TRS system. Under pressure from the relevant professional bodies, HMRC moved the first deadline again (to 5 January 2018) but insisted that existing trusts still needed to be registered by 31 January.
Over the past few weeks it has become clear that the TRS not only falls well short of what was first envisaged but that it is struggling to cope with any use at all. Again under pressure, HMRC have now announced that ‘taxable relevant trusts’ will not face penalties provided that they are registered by 5 March 2018. It is to be hoped that in the meantime significant work will be undertaken to bring the system up to scratch.
This is good news for those who are required to register (and their advisers) – the pressure of trying to register via a malfunctioning system by a deadline that coincides with that for filing tax returns is now gone. For HMRC it is all rather embarrassing and it certainly doesn’t bode well for the much larger IT projects (such as ‘Making Tax Digital’) that they have in the pipeline.