The taxman could take money directly from bank accounts of people and businesses that fail to pay their tax bills under new proposals that are causing ructions in the profession.

In HM Revenue & Customs’ consultation document on payments, repayments and debt, it has proposed extending its powers to allow it to freeze assets from an account equal to the amount owed in tax.

This sum would be paid to HMRC ‘after a specific period’ by the bank/building society after other attempts to collect the debt ‘proved fruitless’.

The response from the profession was colourful, to say the least.

‘Dick Turpin was hanged for helping himself to people’s money – HMRC wants it to be legal. The thought that the Revenue could take the roof over your head without a court order to sanction it is going over the top – if they have a case, they should be able to justify it in court,’ Mike Warburton, of Grant Thornton, said.

Even the CIoT admits it has taken the unusual step of issuing an open letter to the taxman prior to its official response to the consultation, so grave are its concerns.

‘There are serious issues that need to be addressed,’ said CIoT president Rob Ellerby.

‘For example, if someone has a joint bank account, what redress does the “innocent party” in the relationship have?

‘Furthermore, what happens where HMRC and the taxpayer do not agree whether anything is owing and the issue is being handled properly through existing channels? These are the sorts of issues that we will seek to explore in consultation…the CIOT will demand that safeguards exist for the taxpayer,’ he added.

HMRC has responded vigorously, saying the suggested idea would ‘only ever apply’ to established tax debts once other avenues had been exhausted. This type of defaulter would be a chronic late payer. ‘The consultation itself seeks views on the appropriate safeguards to protect taxpayers. Before any of these suggestions ever became law there would be further consultation,’ an HMRC spokesman said.

The taxman argues that the current process of debt recovery, which requires a court order and can involve the seizure of goods, can prove to be an unpleasant experience.

It also proposes to have the ability to hold a charge over a property in lieu of tax owed, while still pursuing the debt through other means.

The consultation runs until 17 September.