HMRC 'to have power to dip into bank accounts'

Plans to give HMRC the power to take money directly from taxpayers’ bank accounts have been criticised by a group of MPs.

The Treasury select committee raised concerns about the proposals, which would see HMRC able to dip into accounts to withdraw what it considers to be unpaid tax, without the need for a court order.

It is estimated that the new powers would enable the Revenue to raise a further £100 million a year – a tiny fraction of the UK’s total £35 billion tax gap.

Under the proposals HMRC would be able to remove money from accounts when more than £1,000 is owed, and when the taxpayer has not responded to a series of four requests. The Revenue will only be able to make the withdrawals if there will be £5,000 left in the account afterwards.

But Conservative MP Andrew Tyrie, who heads up the committee, raised concerns about HMRC’s ability to properly calculate the amount of tax owed.

“People should pay the right amount of tax,” he said, “but HMRC does not always ask for the right amount. Some taxpayers may find money taken from their accounts that later should be paid back. That would be unacceptable.”

The Treasury select committee added: “This policy is highly dependent on HMRC’s ability to accurately determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past.

“Incorrectly collecting money will result in serious detriment to taxpayers. The government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity.”

What do you think? Would you be happy with HMRC dipping into your bank account? Let us know in the comments.

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