Tax 

HMRC takes cash straight from pay packets

HMRC takes cash straight from pay packets

HM Revenue & Customs recovered debt directly from hundreds of pay packets in the last financial year, according to a national accountancy firm. 

In data obtained via a Freedom of Information request, UHY Hacker Young found HMRC used attachment of earnings orders against 428 people in 2017 to 2018.

An attachment of earnings order is a method of debt recovery granted by a court, which determines the minimum amount a debtor needs to live on and with the sum owed then deducted from money earned above this amount.

UHY Hacker Young suggested these orders often appeal to HMRC as individuals cannot reduce payments if short of money one month and compare favourably to the process of physically seizing control of goods to then sell at auctions.

Simon Browning, partner at UHY Hacker Young, said he believes an attachment of earnings order is one of the "most aggressive" tools HMRC has at its disposal.

He said: "They allow HMRC to quickly seize an individual’s hard-earned cash before it even reaches their bank account.

"If individuals want to avoid losing control over their monthly pay checks and how they spend their wages they have to ensure they don’t fall behind on tax payments.

"Overall, HMRC's use of attachment of earning orders could be seen as yet another example of it’s dash for cash against people who can’t pay their bills." 

According to UHY Hacker Young data HMRC's spending on private sector debt collectors rose by 62 per cent to £39m in 2017, up from £24m in 2016, a move the accountancy firm attributed to the government department becoming "increasingly impatient" over chasing outstanding debts.  

An HMRC spokesperson said: "All of HMRC’s powers are given to us by Parliament and are subject to appropriate checks and balances.

"Enforcement action is only ever considered as a last resort, we will always attempt to engage in discussion regarding payment, and when appropriate agree reasonable offers of payment over a longer period of time based on individual circumstances."

rachel.addison@ft.com