New HMRC powers to recover tax debts
The government plans to introduce new powers allowing HMRC to directly raid the bank accounts of tax debtors, focusing on those who owe at least £1,000 and have been contacted multiple times to demand payment.
HMRC would not be able to empty out accounts, but would have to leave a minimum of at least £5,000 across all accounts held by the taxpayer. There will also be other safeguards intended to ensure that direct recovery does not cause hardship.
The measure has, however, been criticised for its potential knock-on effects, raising concerns that businesses whose accounts were raided might not have enough left to pay staff, as well as for the possibility that safeguards might not be sufficient to prevent HMRC from making mistakes. It also raises the prospect of HMRC using direct recovery to settle debts in preference to other creditors where the debtor becomes insolvent…
Click on the link below to read the rest of the Gateley briefing.
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