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Concerns raised over HMRC proposals

11/08/14

Two organisations are concerned over 'smash and grab' tax debt collection.

Concerns have been raised over proposals that could allow HM Revenue and Customs to take money directly from people's bank accounts if they have not paid the tax they owe.

The possibility was raised in a consultation document published recently and would mean tax collectors could bypass court orders to collect cash.

However, the Association of Chartered Certified Accountants (ACCA) has said the plans for this extension of powers risk being unconstitutional and are deeply concerning.

Head of taxation Chas Roy-Chowdhury pointed out that existing safeguards protect taxpayers by ensuring HMRC's activities are subject to review by the courts.

"HMRC's proposed powers effectively throw that principle out the window. It will mean HMRC can take a 'smash and grab' approach by delving into someone's bank account at will and taking their money. If we are going to have these powers imposed, then some other form of review by an officer of the court should be considered," he commented.

Mr Roy-Chowdhury also said he thinks that if the power is granted, it must only be used when all other avenues have been exhausted - and that it should never be applied to people who cannot afford to pay due to financial difficulties, including those on low incomes or the self-employed.

This latter point has also been raised by the Low Incomes Tax Reform Group, which said HMRC could be risking inflicting disproportionate financial and human cost on vulnerable taxpayers.

Although chairman Anthony Thomas said he supported the proposals if they are implemented under the supervision of a judge, there must be safeguards in place to protect those at risk of hardship.

He also questioned what might happen should mistakes occur, commenting: "It is deeply disturbing that recipients of tax credit overpayments, a group already vulnerable to administrative error, are to be included in the list of debts in respect of which the proposals may be applied. Errors could force choices upon these debtors about whether to heat their homes or go hungry."

The consultation on HMRC's proposals closes on September 17th.

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