HMRC: Coming To A Bank Account Near You?
In times past tax collectors would knock doors in pursuit of levies and it appears that HMRC are now considering the modern equivalent – recovery of unpaid taxes directly from debtors’ bank and building society accounts. This new power would be exercised in cases where tax payers are able to pay outstanding taxes but choose not to do so, and do not respond to HMRC’s attempts to contact them.
The intention for the Direct Recovery of Debts (DRD) was announced in the 2014 Budget and the consultation period ran from May to July 2014. The 26 page consultation document included questions on minimum balances, time lines and joint accounts and considered potential safeguards to protect vulnerable tax payers.
The DRD consultation has been met with controversy and experts have expressed concern for a number reasons, such as the absence of independent oversight. Currently HMRC are analysing the feedback received during the consultation period and legislation is expected to be taken forward as part of the 2015 Finance Bill.
HMRC state that DRD will only apply to around 0.2% of taxpayers in the self assessment population, however these plans will undoubtedly split opinion. Watch this space to see whether these proposals see the light of day!
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.