Digital exclusion – should HMRC be doing more for taxpayers and trustees?

HMRC has some great online systems which are invaluable for many taxpayers.

However, they do not appear to be giving enough thought to those taxpayers who are ‘digitally excluded’ through choice, financial circumstances, physical or mental ill-health, or other reasons.

I recently needed to contact HMRC to discuss the new trust registration service.

All trusts, with a few limited exceptions, need to be registered with HMRC by 1 September 2022. As agent, I can register a trust for a client. Once I have done so the ‘lead trustee’ then has to ‘claim’ the trust and separately authorise me to act for the trust to deal with any future updates to the trust detail.

This process requires the lead trustee to go ‘online’ to do the necessary.

Many trusts, which will now need to be registered, are discounted gift trusts or loan trusts which have been set up for financial planning/tax purposes. They typically only have the settlor and/or their spouse as trustees. Some of the trustees are individuals who are not computer savvy and for whom doing anything online may be difficult, if not impossible.

I spoke to HMRC’s ‘help’ desk to discuss this point and was told that a digitally excluded trustee should either:

  • Appoint a family member (who is not digitally excluded) as a trustee; or
  • I should write to HMRC’s ‘specialist trust team’ when I have a trust to register with a digitally excluded trustee.

Observations here:

  • Not a particularly useful ‘help’ desk;
  • Why should a trustee have to do something, appoint another trustee, which is simply to enable them to comply with an HMRC initiative which should take account of digital exclusion? The lead trustee may not want others to be involved in their personal tax planning affairs; and
  • Writing to the ‘specialist trust team’ every time there is such an issue is a nonsense, especially when HMRC are already taking ages to deal with correspondence, if they deal with it at all. This would add cost and inconvenience to an already cumbersome process.

I have written to HMRC for their guidance on how I should deal with this issue. I await their response with interest and will post an update when (if?) I receive a response.

As an aside, I am also seeing digital exclusion as a problem for those wanting to shop or bank. The pandemic has had a material effect on the High Street. Shops have closed with retail activity now only possible online for some brands. The same applies to banks, with the reducing number of branches and apps for personal banking, for bank customers the days of talking to a bank manager, or a human being, are long gone.

There are lots of individuals who do not have access to a computer or a mobile phone for whom everyday transactions are becoming a chore. The quality of life for these individuals is taking a turn for the worse.

I accept that the world is changing and that much more business and personal activity is now online.

However, whilst this digital migration does create efficiencies for a vast number of people, it also creates potential problems for many others.