Opinion  

HMRC providing tax guidance too late

Helen Thornley

Helen Thornley

In the meantime, further changes were made to the TRS rules in October 2020, which brought vastly more trusts in scope. Now, all trusts, whether they pay tax or not, must be registered with HMRC via the TRS by September 1 2022 unless they are eligible for one of a number of exclusions.

However, as it stands in midsummer, guidance on many aspects of the new rules is still evolving and changing, leaving many advisers and trustees uncertain which trusts HMRC is expecting to be on the register in less than four weeks’ time. 

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HMRC staff involved in the policies above have been willing to engage with us and others on the content of guidance – but only after the rules took effect.

While it is unreasonable to expect guidance that addresses every eventuality from the start, having nothing at all of substance for so long for both the CGT reporting and the TRS measures above has caused advisers and taxpayers a great deal of uncertainty and anxiety. 

Detailed guidance regarding new tax rules must be available much earlier for taxpayers and their advisers to have the best opportunity to understand and comply with their obligations in a timely manner. It should be available by the date any new rules take effect – and ideally sooner so taxpayers can plan ahead.

Our concerns are shared with other professional bodies, as noted in the Charter Stakeholder Group’s comments in HMRC Charter Annual Report published this week. 

We hope that HMRC takes these concerns on board for their next big project Making Tax Digital for Income Tax, which from April 2024 will affect how millions of self-assessment taxpayers keep their accounting records and file their tax return information.

It is vital that HMRC sees the benefits to taxpayers and their agents of timely guidance before those changes come into effect.  

Helen Thornley is a technical officer at the Association of Taxation Technicians