Weekly tax brief

More difficulties created by the Trust Registration Service

15 September 2020

The disadvantage of a micro-service is that it is set up for a small number of functions and stands alone rather than connecting with other HMRC online processes, eg Self-Assessment. Therefore, HMRC has confirmed that, for security purposes, the trustees are required to authorise the agent to access the system separately on their behalf. Obviously, any steps taken to improve security of online services are to be welcomed, but this additional authorisation is causing issues for trustees and agents.

The use of a micro-service means that, even where an agent did the initial TRS registration for a trust client, or files their self-assessment tax returns annually and has agent authorisation in place, they are unable to make any amendments or confirmations on the TRS system until the trustees have given their separate approval.

This has caused frustration for some trustees who engage agents to deal with all their HMRC and tax matters and may have already authorised an agent to deal with their annual self-assessment tax returns. They quite reasonably assume that their agent can deal with TRS as well. Furthermore, their motivation to engage an agent may be so that they do not need to use HMRC’s systems at all. However, in order to provide the authority, they need to set up a Government Gateway account for each trust of which they are a trustee.

The online method of authorisation means those trustees with no internet access are unable to complete the authorisation. HMRC has said it will provide an alternative solution for those who are digitally excluded or fall into the ‘assisted digital’ category, but so far, no alternative has been offered.

Those not registering a trust with the TRS could face financial penalties. Also, the 2019/20 trust self-assessment tax return now asks trustees to confirm the following - 'Tick this box if there have been any changes or additions to the people associated with the trust, and you’ve provided the updated details on the Trust Register or you’ve confirmed on the Trust Register that there have been no changes to the trust.' Therefore, where trustees are having difficulties or are unable to authorise their agent, they are not currently able to complete and submit their 2019/20 tax return accurately.

Obviously for some Trustees the separate authorisation is not an issue, but HMRC needs to consider the long-term use of such micro-services and appreciate that taxpayers would be better served with joined up tax systems. Most urgently, HMRC needs to find a solution for those that are unable to authorise their agents on the TRS system now.