21st November 2014
Chancellor George Osborne has watered down plans to give the taxman the power to raid the bank accounts of those that owe money to HM Revenue & Customs (HMRC).
Tax inspectors will now have to give a face-to-face warning to individuals before raiding their bank account, drastically altering the ‘direct recovery powers’ that had been planned.
The plans to allow HMRC to take money directly from people’s bank accounts attracted widespread criticism and fears that people would money wrongly withdrawn when they did not owe anything.
Osborne has said there will now be a number of safeguards put in place to ensure the measure ‘only catches those who are playing the system’.
A face-to-face meeting with a tax inspector will be one requirement and those who owe money will also be given the right to appeal and take unsuccessful appeals through the county courts. The appeal time has also been extended from 14 days to 30 days.
A specialist unit will be set up to deal with vulnerable members of society.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said that while he would prefer ‘the power were not being proposed at all’ the changes were welcome.
‘There will now be a totally different ethos behind the way the power will be designed and implemented,’ he said. ‘It will no longer be played out as a remote controlled video game where HMRC remotely takes money out of the taxpayers’ accounts.
‘There will now need to be face-to-face engagement between HMRC and the taxpayer before anything can happen. Vulnerable taxpayers will be identified and taken out of the process entirely and put in touch with a dedicated helpline.’
He added: ‘We consider it’s a good day for taxpayer confidentiality as the new powers will be restricted to only asking the bank or building society for the balance in the account rather than 12 months information.
‘[We] will make every endeavour to ensure the government does not subsequently seek to strengthen these powers post implementation.’