HMRCs licence to help themselves
HMRC have been granted permission to dip in and out of people’s bank accounts to recover tax and tax credit debts directly from debtors’ bank and building society accounts, including ISAs.
If you think this is going to target the big boys who owe millions, then you’re wrong. The Direct Recovery of Debts will focus on debtors who owe at least £1,000 and have been contacted multiple times by HMRC. Yes, there are always going to be those few that undermine the law and go out of their way to avoid their financial obligations, but surely they need to be brought to account in a proper way instead of HMRC dipping into their bank account and helping themselves?
The small print stipulates that a minimum of £5,000 will be left across all accounts; include ISAs after the debt is recovered. However, if a business’s accounts were raided just when they receive the funds to pay salaries and other invoices, they could find there was not enough money left to meet these liabilities. I.e. what’s the point in having £5,000 left over when your outgoings will be in excess of that figure?
This new initiative was delivered in the Chancellor’s Budget last week and I wonder why it was kept so quiet?
The majority of the time we support the HMRC when they aim to close loopholes and ensure that everybody pays their fair share of tax, but there has to be a common sense approach
We would like to hear what you think by joining the conversation below.
N K Wayne | 25 March 2014
This will start the ball rolling on undisclosed bank accounts much more than avoiding tax on interest ever would have done.
A J McNally | 25 March 2014
I cannot help thinking that as this was motivated by the chance to catch high net worth individuals who use highly contrived tax avoidance schemes the law of unintended consequences is invoked. This catch all piece of legislation is most likely to cause maximum distress to taxpayers who are innocently caught in disputes not involving large amount of tax revenue lost to the public purse.