Legal News | 2.02.23
HMRC issues guidance on TRS penalties
HMRC’s fining powers have been in the news recently with former chancellor Nadhim Zahawi MP removed as Conservative Party chairman after he admitted to paying HMRC a penalty in connection with his personal tax affairs. Also, last week, HMRC issued guidance on when it will charge trustees a penalty for failing to register or maintain their trust with HMRC.
Regular readers will know that, since 1 September 2022, trustees of nearly all UK express trusts have been required to register and maintain their trust, whether or not it is liable to tax, with HMRC through its Trust Registration Service. Details recorded in the trusts register include the trustees’ names, addresses and contact telephone numbers.
In the guidance, HMRC says that it will decide whether or not to charge penalties on a case-by-case basis and that it recognises that registering a trust is a new requirement with which trustees may not be familiar.
HMRC goes on to say: “We will not charge you a penalty if we find out that you’ve failed to register or to maintain a trust, as long as this was not deliberate behaviour [and] you take action to correct this within the time limit we set. We will only charge you a penalty if we decide you deliberately failed to register a trust or to update its details”.
Trustees should bear the guidance in mind as non-compliance could result in HMRC charging them a fixed penalty of up to £5,000.
If you would like help registering a trust or updating its details, please get in touch with your usual Wansbroughs’ contact or e-mail the Private Client Team at wealth@wansbroughs.com.