The Trust Registration Service (TRS) has been creating endless problems for tax advisers, as to access it they must first register for an Agents Service Account (ASA).
Purpose of TRS
The TRS is an example of an over-engineered solution for a problem that may not exist, a bit like MTD. The government has required a central register of all UK trusts to be set up in response to the EU Fourth Money Laundering Directive.
As its name implies, the aim of this EU directive is to reduce opportunities for money laundering which supports criminal and terrorist activities. However, a national risk assessment undertaken by the Home Office and HM Treasury found that there is very little evidence of UK trusts being abused for money-laundering, and no evidence of trusts being used for terrorist financing.
In spite of this lack of evidence, the Trust Registration Service was launched on 10 July 2017, although tax agents were not given access to it until 17 October 2017.
All new trusts and complex estates for deceased persons must be registered with the TRS before a UTR number can be issued for that trust/estate. Form 41G (trusts) to register trusts and estates with HMRC was withdrawn on 1 May 2017.
The deadline for registering trusts created in 2016/17 would normally be 5 October 2017, but that deadline was pushed back to 5 December, as the TRS wasn’t open to tax agents at the earlier date. After pressure from the CIOT and ICAEW, this registration deadline has been extended to 5 January 2018.
However, all existing trusts must also register with the TRS in order to submit a self-assessment tax return for 2016/17 or later year. The deadline for these trusts to register is 31 January 2018, but the ICAEW, CIOT and ATT have asked for that deadline to be moved back to at least 5 April 2018.
Agents Service Account
The first problem agents come up against when trying to access the TRS is the authorisation to act. HMRC requires tax agents to be authorised through the new Agent Services Account (ASA), which is being developed as part of MTD, but it is still only in the pilot phase. The normal authorisation route through the government gateway, which is used for most other HMRC services, doesn’t work for the TRS.
Tax agents without an ASA can’t access the TRS. What’s more, each firm can only have one ASA which is linked to its UTR number, as that account will be used to access all the services needed for MTD.
HMRC has warned: “The Agent Services account will be the central point of contact with HMRC in the future, so it may not be appropriate for this to be set up by the trust team without consulting the wider firm.”
The link to set up the ASA won’t be made available on gov.uk until 20 November. In the meantime, tax agents should be able to access the ASA setup procedure through the TRS page. The HMRC computer system should identify that the government gateway credentials entered are those of a registered tax agent, and will direct you to email HMRC to request the link to set up an ASA for your firm.
What is needed
The information required to register a trust is quite extensive, and in many cases it may not all be held by the tax agent. For example, details of the beneficiaries include; dates of birth, NI number, passport number and address. The ATT has published a technical briefing to help tax agents understand what is needed for the TRS and the penalties which may apply for non-compliance.
All existing trusts must be registered through the TRS, even where HMRC has held details of the trust for many years. The TRS has not been pre-populated with information HMRC already holds, so the tax agent or trustee must input all that information again. It is possible to save an incomplete form in the TRS, but you can’t skip questions to go back to later.
If a trustee has started populating the register, the tax agent can’t continue the process or review what the trustee has done.
HMRC is running a talking points webinar for tax agents about the TRS on Friday 17 November 2017. If you have trust tax returns to submit this season it may well be worthwhile registering for that webinar to find out how you can avoid the pitfalls of TRS.