The government is considering the response to its consultation document on proposals to introduce powers allowing HMRC to dip into a tax payer’s bank account in order to recover arrears of tax. There will be safeguards:
- The debt recovered would have to be £1,000 or more.
- A minimum of £5,000 has to be left in an account after the debt has been recovered.
Needless to say this proposal has created quite a stir.
The British Banking Association wants the Chancellor to take legal advice on the matter as they believe the legislation would contravene the Human Rights Act. Others believe that HMRC has proved itself incompetent in the past to accurately calculate the amount of tax arrears owed by an individual. HMRC would, in effect, become judge and jury, assessing and collecting tax without any initial remedy or intervention available to the tax payer.
Let’s hope that the firestorm this proposal has provoked will temper any future change in the law. At present it is likely that HMRC will be given these new powers as part of the Finance Act 2015.