HMRC gain new debt collection powers
Posted on 2014-06-17, by Montpelier
The March 2014 Budget announced new measures whereby HMRC will be able to take money directly from the taxpayers’ bank account where the overdue tax liability exceeds £1,000. We already know that the banks are required to share account information with HMRC so it would presumably be a straightforward exercise to compare bank balances with tax debts which were overdue.
Initial reaction to this proposal was one of ‘considerable concern’ as the sudden withdrawal of funds could result in essential payments not being honored or the savings of a spouse being removed to pay a tax bill which was not theirs.
Further information has now come to light which suggests that the approach will be more calculated and will only apply in certain circumstances.
The new information includes:-
- only those with old tax debts who have been contacted at least four times will be affected
- if the debt is in dispute it will not be collected in this way
- the taxpayer will be notified in writing prior to the money be taken
- the sum involved will be frozen for 14 days beforehand to give the taxpayer the opportunity to pay up voluntarily
- A minimum of £5,000 will always be left in the account
- if there are genuine mitigating circumstances or the money can be proved to be set aside for something specific, HMRC would accept payment by instalments as an alternative
This approach indicates that they are serious about adopting this strategy and so it seems likely that it will be something that we will see in 2016.« Back to Articles