FOLLOWING HMRC’s dramatic climbdown over its controversial plans to take outstanding tax debts directly from people’s bank accounts, the accounting industry has been quick to react.
Advisers seem relieved at the move, despite continuing concerns over HMRC’s push towards more draconian powers.
ICAEW chief executive, Michael Izza, said: “We will need to keep a careful eye on the passage of this legislation through Parliament to make sure that the commitments are not watered down.
“And I still have a lingering fear that we might still see other government departments and agencies trying to introduce similar approaches to collecting money owed to them by tax payers. But, as a result of the campaign by ICAEW and the accountancy profession, there is now a precedent that this cannot be done without a set of safeguards which includes a role for the courts.”
HMRC’s backtracking has gone some way to redress the balance to “circumvent the courts to withdraw money from accounts and frighten many people”, believes ATT president, Natalie Miller.
She said: “The proposed changes are due to be reflected in legislation after this parliament, meaning that these highly significant measures, which must be exposed to public and professional scrutiny, will have time to be properly developed.
“These revisions are a testament to the clear tangible improvements to proposals when HMRC engages in sustained consultation with those who are in the best position to advise: the professional bodies representing the advisers and their clients who will engage with, and be affected by, such legislation.”
The Low Incomes Tax Reform Group (LITRG), meanwhile has offered a guarded welcome to the taxman’s revisions.
LITRG president, Anthony Thomas, said it was imperative that vulnerable taxpayers or those on low income who “gets in a muddle should not be caught up in a process designed to target those who have the funds to pay their tax on time but who resolutely refuse to do so”.
He also expressed deep concerns that taking funds out of someone’s bank account without authorisation by the courts ran counter to the rule of law.
Thomas said: “The County Court procedure contained in the revised proposals provides the necessary judicial oversight before any money is taken – although not before the account is first frozen.
“The undertaking not to apply DRD before a face-to-face meeting with the taxpayer, and not to apply it at all where the taxpayer is adjudged vulnerable, is undoubtedly a step in the right direction and should prove adequate protection for that group of individuals.
“But importantly, these improved safeguards must be adequately set out in primary legislation. It is no good writing them only into guidance, as guidance can always be changed without reference to Parliament. We understand draft legislation will be published in due course, and we shall examine it keenly to ensure that it does all that we expect it to do.”
The Chartered Institute of Taxation (CIOT) said it would be looking closely at the detailed legislation to ensure all the safeguards are actually implemented into primary legislation.
CIOT president Anne Fairpo was adamant that the rule of law should not be undermined, and expressed her delight that the “revisions are proof that the Government has listed to, and taken on board, the concerns of interested stakeholders and is evidence of the merit of sustained engagement.”
Adam Harper, AAT’s director of professional development, said: “AAT welcomes HMRC’s decision to take on board our recommendations. Most people, who pay their taxes in full and on time, rightly feel it is unfair that anyone is able to evade paying their dues, so we whole-heartedly support any attempt to ensure that a non-compliant minority meet their obligations.
“Our concerns centred on a number of issues that we felt, as proposed, could make diligent enforcement of this legislation difficult. HMRC’s decision to listen to AAT’s concerns gives us the confidence that HMRC will have created a more robust and thorough policy that will tackle those who wilfully evade paying what they owe whilst balancing the rights of HMRC with the rights of the tax payer.”
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