POWERS to directly recover debt from taxpayers who persistently fail to pay could net HMRC as much as £365m by the end of 2018/19, according to official estimates.
Projections made in the Budget document show the government expects the move to generate nothing in its first year, £65m in its second, followed by £110m in 2016/17, £110m in 2017/18 and £90m in 2018/19.
The scope for the wrong amount being deducted in error has caused practitioners to query the wisdom of the proposal, but the taxman maintains it will only utilise the powers in cases where the debt it well-established and with series of stringent safeguards in place.
Nearly three out of five complaints made to the taxman in 2010/11 resulted in HMRC admitting fault, according to research conducted by law firm Pinsent Masons in 2012.
More recently, more than a third of taxpayers were found to be at risk of paying the wrong amount of tax due to issuing errors by HMRC, UHY Hacker Young claimed last year. Analysis conducted by the top 20 firm of tax codes sent to its clients revealed that around 37% would have resulted in people paying the incorrect amount of tax.
You may also like
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources.