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Allowing taxman to raid accounts would violate 'a fundamental tenet of English law and democratic society', accountancy chief tells MPs
Proposed new powers that will allow HM Revenue & Customs (HMRC) to dip into individuals' bank accounts to reclaim money owed to the Exchequer have faced fresh criticism. The Treasury select committee heard that the new powers, contained in the detail of last month's Budget, were "excessive" and potentially illegal. In a written submission to MPs, Frank Haskew, head of the tax faculty at the Institute of Chartered Accountants in England & Wales (ICAEW), said the plans were "of considerable concern to many taxpayers and accountants". He said it was "a fundamental tenet of our English law and our democratic society" that money "cannot be grabbed from somebody’s account without a judge agreeing to the move". The change is due to be made in 12 months' time following a consultation process and is forecast to raise an additional £65m in tax revenue, rising to just over £100m the following year.....Read more here
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In the Budget, Chancellor George Osborne outlined plans for new powers to recover tax debts from anyone who owes more than £1,000. Now HM Revenue and Customs (HMRC) has explained how the system will work. An accountancy body which previously described the powers as "draconian" said limits to the rules were "robust".
The rules include:
The tax authority said that the average debt of those likely to be targeted was £5,800. It added that in a half of cases, debtors had more than £20,000 in their accounts. The new powers would allow HMRC to seize money owed in tax, or owed as a result of tax credit overpayments. HMRC would be able to take the money from bank accounts, building society accounts, and Individual Savings Accounts (Isas).
'Less fearsome'After the Budget, ACCA accountancy body described the plans as "seriously draconian" but now call them as "less fearsome than first thought". "On paper, the safeguards look relatively robust, and the reality is it is unlikely that anyone will be left penniless. The fact that there will be plenty of opportunity for those owing taxes to respond to HMRC and appeal before any funds are taken," said Chas Roy-Chowdhury, head of taxation at the ACCA..............Read more here
Plans to allow the tax authority to settle unpaid demands by taking money from people's bank accounts have been criticised by a group of MPs.
The Treasury Committee says it is very concerned because tax officials have a history of making mistakes. Chancellor George Osborne unveiled the plan at this year's Budget. But in a wide-ranging report, the committee did welcome another Budget plan - to allow greater flexibility on how pension savings can be used. In the Budget, Mr Osborne outlined plans for new powers for HM Revenue and Customs (HMRC) to recover tax debts from anyone who owes more than £1,000 in tax or in tax credits. This would allow the tax authority to seize the tax owed directly from debtors' bank accounts.
HMRC PerformanceBut the committee said the plan was problematic owing to HMRC's performance in the past when it has failed to accurately calculate tax bills........Read more here
Plans to allow the tax authority to settle unpaid demands by taking money from people's bank accounts have been criticised by a group of MPs.
The Treasury Committee says it is very concerned because tax officials have a history of making mistakes. Chancellor George Osborne unveiled the plan at this year's Budget. But in a wide-ranging report, the committee did welcome another Budget plan - to allow greater flexibility on how pension savings can be used. In the Budget, Mr Osborne outlined plans for new powers for HM Revenue and Customs (HMRC) to recover tax debts from anyone who owes more than £1,000 in tax or in tax credits. This would allow the tax authority to seize the tax owed directly from debtors' bank accounts.
HMRC PerformanceBut the committee said the plan was problematic owing to HMRC's performance in the past when it has failed to accurately calculate tax bills........Read more here