Regulation  

More safeguards announced for tax recovery plan

HM Revenue and Customs has included safeguards in its controversial plans to recover tax debts directly from people’s bank accounts.

In a statement, David Gauke, financial secretary to the Treasury, said: “We are strengthening the guarantees we can offer taxpayers that the powers will only be used when debtors have consistently refused to talk to HMRC and settle their debts, and their use will be subject to the toughest scrutiny and oversight possible.”

Direct recovery of debts will give HMRC the ability to recover cash directly from people’s bank and building society accounts and Isas if they owe £1,000 or more. It is expected to bring in £100m a year.

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However, the proposals have created a stir among consumer groups and legal professionals. In September, Gary Richards, chairman of the Law Society’s tax law committee, expressed concern that HMRC was pushing for these powers.

Following a consultation, the Government has agreed that an HMRC officer will visit debtors to help them settle their affairs.

A new specialist unit will be set up to deal with cases involving vulnerable members of society, and judicial oversight will be factored in by allowing people to appeal through the county court.

More safeguards announced for tax recovery plan

HMRC has included new safeguards in its plans to recover tax debts directly from people’s bank accounts.

Damian Fantato

HM Revenue and Customs has included safeguards in its controversial plans to recover tax debts directly from people’s bank accounts.

In a statement, David Gauke, financial secretary to the Treasury, said: “We are strengthening the guarantees we can offer taxpayers that the powers will only be used when debtors have consistently refused to talk to HMRC and settle their debts, and their use will be subject to the toughest scrutiny and oversight possible.”

Direct recovery of debts will give HMRC the ability to recover cash directly from people’s bank accounts, building society accounts and Isas if they owe £1,000 or more. It is expected to bring in £100m a year.

However, the proposals have created a stir among consumer groups and legal professionals. In September, Gary Richards, chairman of the Law Society’s tax law committee, expressed concern that HMRC was pushing for these powers.

Following a consultation, the Government has agreed that an HMRC officer will visit debtors to help them settle their affairs.

A new specialist unit will be set up to deal with cases involving “vulnerable members of society”, and judicial oversight will be factored in by allowing people to appeal through the county court.

Adviser view

Steven Pyne, partner at London-based Holden and Partners, said: “HMRC has the right to retrieve a debt and can see it would save money not going through the courts. But it needs to be properly thought through, and guidelines need to be rigid. It should be for exceptional circumstances and a last resort.”