HMRC cannot have an unfettered right to take taxpayer money

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One of the unexpected measures introduced in the budget was a right for HMRC to take money in settlement of tax debts straight from taxpayer bank accounts so long as at least £5,000 is left for their remaining use.

I admit I have significant concerns about this new right despite the fact that I have, for some time, demanded that HMRC take better steps to recover tax debt. That is because there are two issues that need to be separated here.

One is about people not paying tax debt. Measures to help recover this are reasonable, including the power to take assets. There is no doubt at all that many people with proven tax debt where there remains no dispute remaining as to the sum owing do still try to avoid making settlement to HMRC using almost any ruse they can. For these people I have little sympathy. Powers for HMRC to recover debt in these cases at lowest cost are reasonable. This new power could help achieve this goal.

However, the other situation is taking payment when the tax debt is disputed. That is unacceptable. When a debt has not been proven there should not, in my opinion, be a right for HMRC to take cash from a taxpayers account. This new rule does therefore require proper protections including a fast track appeals system against any threat of inappropriate recovery of sums in dispute (which of course may be only part of the total sum owing) that must be administered efficiently, quickly, and independently of HMRC or there is real risk of abuse here.

Tax justice is, I stress, a two way process. Very often I am concerned at taxpayer abuse but it would be quite wrong to think a tax authority could not abuse its powers. Appropriate checks and balances must always be in place, and in this situation it is not clear that HMRC will be subject to them and that worries me.


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