New HMRC powers to raid your bank account proposed

March 21st, 2014  |  Published in Uncategorized

In the old days, if you or your business went to the wall, the Crown had preference – ie your VAT and tax bills had priority over other creditors.

Now HMRC are to be given powers to just help themselves from your bank account, as long as they leave you with at least £5,000. The plans would allow the tax authority to seize assets from anyone who owes more than £1,000 in tax or tax credits.

The ACCA accountancy body criticised the proposal saying that HMRC had a record of making mistakes. But a spokesman for the tax authority said that safeguards would be put in place.

Under the proposals, HMRC would be able to seize money from bank accounts, but only after they had contacted the debtor several times. Good luck with the legal challenges, I’m sure we haven’t heard the last of this.

 

EDIT: It may be illegal. No S**t, Sherlock.

Frank Haskew, head of the tax at the Institute of Chartered Accountants in England and Wales, told members of the Treasury select committee that it is “a fundamental tenet of our English law and our democratic society” that money “cannot be grabbed from somebody’s account without a judge agreeing to the move”.

He added: “At the end of the day, we can’t have HMRC as judge and jury on this.”

Haskew said that the powers, which could come into force next year, are “extremely worrying and excessive”, adding that they were “of considerable concern to many taxpayers and accountants” and that “there are no details yet of any judicial or other safeguards that could protect taxpayers”.

He warned that the new law could have “perverse effects”, encouraging people to keep their money in cash, rather than their bank account, in order to keep it out of HMRC’s grasp.

 

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