Proposed new powers allowing HM Revenue & Customs (HMRC) to raid bank accounts to collect unpaid tax could be damaging and could lead to officials becoming “ a law unto themselves”.
The Chancellor announced details of the move in his Budget last week and said that HMRC will be able to take money direct from the bank accounts of people who owe more than £1,000 in tax or tax credits.
However, under the proposals, officials would only be able to use the power for people who have been asked “multiple times” by the taxman to pay up and must leave at least £5,000 in their account.
That said, the fear is that, if the department takes money from a business account, it could leave the organisation short of enough money to pay other bills, such as wages.
There are also concerns that HMRC has a record of making mistakes but a spokesman for the department has insisted that safeguards would be put in place to ensure that “honest taxpayers” were not targeted.
According to the Budget documents, the move would bring the UK in line with many other tax authorities that already have the power to recover debts directly from an individual’s account, such as the US and France.
A spokesman for the department said that it is only a minority that do not pay their taxes on time, while some refuse to engage with the taxman at all, which is unfair on the vast majority who pay their taxes in full and on time.
He added that there will be a consultation shortly on the new measure to tackle people who have the means to pay outstanding tax bills but are choosing not to, who usually have, on average, over £20,000 in their accounts.