The taxman could take money directly from bank accounts of people and
businesses that fail to pay their tax bills under new proposals.
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 it in tax.
This amount would be paid to HMRC ‘after a specific period’ by the
bank/building society of other attempts to collect the debt ‘proved fruitless’.
The taxman argues that the current process of debt recovery, where it
requires obtaining a court order to do so and can involve the seizure of goods,
can prove to be an unpleasant experience.
‘Taxpayers who have a County Court Judgment entered against them find their
creditworthiness affected. Direct attachment could be seen as less disruptive
than the other recovery methods of distraint against goods, or HMRC seeking
summary action through the magistrates’ court. In addition, taxpayers whose
assets were attached by HMRC would no longer face the additional costs
associated with seeking a court judgment which HMRC would pass on,’ said HMRC in
The taxman also proposes having the ability to hold a charge over a property
in lieu of tax owed, while still pursuing the debt through other means.
Grant Thornton senior tax partner Mike Warburton said the proposals for an
extension of HMRC’s powers were completely unwarranted.
‘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,’ Warburton told the
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