HMRC issues new guidance on penalties for TRS non-registration

Monday, 23 January 2023
HMRC has issued three new guidance documents on the new obligation to register and maintain trust information on its Trust Registration Service (TRS).
Guidance puzzle

The documents explain when HMRC will issue a penalty charge for not registering a trust or not keeping the entry up to date, how to ask for a review or appeal the charge and how to pay it. The penalty can be up to GBP5,000 if HMRC suspects deliberate non-compliance.

HMRC will take decisions on whether to issue a penalty on a case-by-case basis. 'Registering a trust is a new requirement and we recognise that trustees may not be familiar with the process', says the guidance. 'We will not charge you a penalty if we find out that you have 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 or agents who disagree with a penalty charge can request a review or appeal to a tribunal. A review request must be sent directly to HMRC and must reach it within 30 days of the date the penalty letter is issued. HMRC's reply will normally be sent within 45 days of receipt of the taxpayer's request. HMRC will not try to collect the penalty while it is reviewing the decision.

Taxpayers who do not want to ask for a review or whose request for a review is rejected can appeal to a tribunal within 30 days of the date of the penalty decision letter or the letter announcing that a review has been rejected. In the latter case, however, HMRC reserves the right to collect payment of the penalty while the appeal is in progress.


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