Trusts, MTD and penalties – HMRC’s latest guidance
HMRC’s Agent Update 89 provides guidance on matters covering trusts, MTD for self assessment and changes to the penalties regime.
Trust registration service and viewing customer data
Agents within the same business who share their user ID and password may experience issues when registering a trust. HMRC is aware that when two different users access the trust registration service at the same time, using the same user ID and password, they may see a different customer account to the one they have authorised access to and not the one they want to register.
The issue arises because of shared user IDs and passwords within a business. Agents are reminded that user IDs and passwords must not be shared. Functionality is available within the Government Gateway to allow additional user ID and passwords to be created for each member of staff.
Update on Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA)
The government has announced in a Written Ministerial Statement (WMS) that MTD for Income Tax Self-Assessment (ITSA) will be introduced a year later, in the tax year beginning April 2024. This is in recognition of the challenges faced by many UK businesses and their representatives, as the country emerges from the pandemic over the last year and having listened to stakeholder feedback.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025.
It will be confirmed at a later date when all other types of partnerships will be required to join.
Penalties for the late filing and late payment of tax
The new, fairer system of penalties for the late filing and late payment of tax for ITSA, announced in March 2021, will now come into effect for those mandated for MTD for ITSA in the tax year beginning from April 2024. For all other ITSA customers, this will come into effect in the tax year beginning April 2025.
In addition, the government has laid regulations in Parliament setting out the design and scope of MTD for ITSA, in order to help those impacted by the changes to prepare, and for their representatives to develop their own support and guidance.
HMRC provides opportunities for agents to raise queries about HMRC systems and to report issues that are affecting taxpayers and their clients via the agent forum. Agents can join the agent forum by registering now.
Read the full Agent Update 89 now.