Their hands in our pockets
The taxman can now demand payment of disputed amounts of tax from people who have used a tax avoidance scheme, even if the courts haven’t yet ruled that the scheme technically fails to save tax. This is tough for those people who have used fancy tax saving schemes, as we discuss below.
However, the taxman doesn’t want to wait for taxpayers to write him a cheque – he has asked for the power to take money directly out of their bank accounts. That would include accessing joint accounts and savings accounts such as ISAs.
It is proposed that the taxman would use this power to collect debts of £1,000 or more, where the taxpayer has refused to respond to letters or calls from HMRC on at least four occasions. Note that the debt doesn’t have to be disputed or avoided tax – it could be overpaid tax credits, estimated amounts of any tax including PAYE, penalties, or even tax owed to another country which HMRC has agreed to collect.
There will be no requirement for the taxman to prove the debt is actually due before he asks the bank to freeze your account, and then after 14 days collects the money he claims is owed. This would give HMRC advantage over other creditors who have to apply to the County Court for an order to collect debts.
These proposed new powers for HMRC would side-step the courts completely. Currently, HMRC can seize a debtor’s goods and possessions without a court order, but not money in a bank account.
These new powers will not come into effect until the law has been passed by Parliament. However, as a General Election has been timetabled for 7 May 2015, it is possible that a Finance Bill containing these powers will be rushed through without much scrutiny in order to clear the decks before Parliament is dissolved for the election.
You can protest about these proposed powers by signing this petition: http://epetitions.direct.gov.uk/petitions/68384, or by writing to your MP.
