HMRC contacting trusts over tax return errors
Trustees across the UK are receiving unexpected letters. HMRC is contacting trusts over tax return errors linked to the type of trust reported. Therefore, if a letter lands on your desk, act promptly rather than ignoring it.
What has prompted the campaign
The latest compliance campaign focuses on one specific box. HMRC has reviewed returns where box 8.15 was ticked. That tick confirms the trust is not an accumulation or discretionary trust.
However, HMRC’s records suggest otherwise in some cases. Consequently, those trusts may have paid tax at the wrong rates.
Why the trust type matters
Trust classification directly affects the Income Tax rates applied. Accumulation and discretionary trusts generally pay special rates:
- 39.35% on dividend-type income
- 45% on other income
By contrast, many other trusts pay lower rates. Nevertheless, some discretionary trusts remain exempt from the special trust rates. As a result, the position is not always straightforward.
How trustees should respond
Do not leave the letter unanswered. Instead, review each relevant tax return carefully. Then respond to HMRC by 2 November 2026.
Your next step depends on what you find:
- If the returns are correct, simply tell HMRC.
- If additional tax is due for 2024-25, amend the return and pay the tax.
- If earlier years are affected, you may need to make a voluntary disclosure.
Interest may also apply. Furthermore, HMRC may charge a penalty depending on the circumstances.
Check your Trust Registration Service details
Meanwhile, take the opportunity to review your wider compliance. Trustees must keep information on the Trust Registration Service accurate. In particular, record any changes to beneficiaries promptly. Otherwise, further problems can easily arise.
Talk to us
With HMRC contacting trusts over tax return errors, early advice makes a real difference. If you receive a letter, get in touch. We will review your position and recommend the right action before the deadline.
