HMRC will soon have powers to raid bank accounts
25th April 2014
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New powers allowing HMRC to raid bank accounts to collect tax debts was announced in the recent Budget. The plans would allow the tax authority to seize assets from anyone who owes more than £1,000 in tax or tax credits. This is quite worrying as the HMRC does have a record of making mistakes. However HMRC have stated that safeguards would be put in place to prevent such mistakes. The proposal will now be the subject of consultation within the industry.

Under the proposals, HMRC would be able to seize money from bank accounts, but only after they had contacted the debtor several times. Introducing these measures without proper workable safeguards could well lead to an abuse of power.        

The tax authority would not be allowed to empty these individuals' accounts. They must leave a minimum of £5,000 in the account.

These proposals will bring the UK in line with many other tax authorities, which already have the power to recover debts directly from an individual's account, but can these countries' tax collection systems be regarded as role models?

The seizure of assets could have a knock-on effect. If businesses' accounts were raided, they could find there was not enough cash left to pay staff. Safeguards are to be put in place to ensure that honest taxpayers are not targeted, although details are not yet available. Any one affected would always have the right to appeal against any move.

By David White a Partner in Charterhouse, based in Beaconsfield

 

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David W

Member since: 16th May 2013

David White is an equity partner in Charterhouse a practising firm of Chartered Accountants based in Beaconsfield and Harrow. David is Charterhouse through and through having been with them for 30 years...

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