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