InvestmentsMay 9 2014

Morning Papers: TSC ‘very concerned’ with new HMRC powers

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MPs have warned that “innocent people” face having money taken straight out of their bank accounts under “draconian powers” set to be used by HM Revenue and Customs, the Telegraph reports.

A Treasury plan to allow HMRC to remove cash from bank accounts without a court order is “very concerning” because of its history of mistakes, the Treasury Select Committee said in its response to the Budget.

In a consultation document this week, HMRC said the “direct recovery” powers could be used to take money from joint accounts.

The tax authorities admitted this week that about 17,000 people a year would be targeted under the new measures, set out in the Budget and designed for use against people who owe them money.

However, the TSC said that taxpayers could suffer “serious detriment” if officials are able, either by mistake or through an “abuse” of power, to take money from people who have done no wrong.

Under the planned new measures, tax officials will have an automatic power to take money from a bank account when the holder has failed to act on four formal warnings requiring payment.

Currently officials can only remove money in this way with the permission of a magistrate or judge.

The Treasury insists that “safeguards will ensure that the new power is only used against those who have repeatedly refused to pay their taxes”.

UK set to exceed 2008 growth

Data from the National Institute of Economic and Social Research has revealed UK growth will exceed its 2008 high in the next few months.

According to the Guardian, the institute predicts that GDP will grow by 2.9 per cent this year, 0.4 percentage points higher than its estimate from three months ago.

Forecasts for 2015 through to 2017 are about 2.4 per cent growth annually, although GDP per capita remains “well below its previous peak and is not expected to exceed that before 2017”.

Co-op chairman quits

The chairman of the Co-operative Bank is to step down from his role after a year in the job as the lender launched a £400m capital raising that will dilute its parent Co-op Group’s stake, according to the Financial Times.

Richard Pym, who was appointed as chairman last June, intended to step down from his role by the end of this year.

The bank, which is raising the additional funds to cover higher than expected misconduct costs, said the Co-op Group “would sell a portion of its existing 30 per cent stake and use the proceeds to participate in a new share placing”.

Saga head to get £80m windfall