Avoiding Trust Registration penalties – the latest HMRC advice

The fixed £5000 penalty is applied if you don’t register a trust or keep its details up to date. As registration is a new and unfamiliar process for many trustees, HMRC won’t apply the penalty if it decides non-compliance was not deliberate and you correct the error within their deadline. Decisions will be on a case-by-case basis.

Review or appeal

Should HMRC decide you deliberately didn’t comply, you have 30 days from the date of the penalty letter to request a review. HMRC will normally respond within 45 days and won’t collect the penalty during the review period.

If you don’t want to ask for a review or the review supports the penalty decision, you can appeal to a tax tribunal within 30 days of the penalty decision letter. However HMRC can collect the penalty during the appeal period.

HMRC’s TRS penalty policy is explained in three new guidance documents:

• When HMRC will issue a penalty
• How to ask for a review or appeal
• How to pay a penalty.

For more advice, talk to our Entrepreneurial Wealth team.