MPs concerned by plans to raid taxpayer bank accounts

MPs concerned by plans to raid taxpayer bank accounts

The taxman could soon be given the power to raid your bank account or savings for any tax you fail to pay.

The government has proposed that anybody who owes more than £1,000 in unpaid tax could be subject to a bank account raid by HM Revenue & Customs (HMRC), which said it is aiming to get its hands on £375 million in unpaid tax during the next four years.

Chancellor George Osborne says such a measure can be justified on the grounds that the Department for Work and Pensions is already allowed to do the same to ensure parents pay Child Maintenance.

However, the Treasury Committee is worried by the proposal set out in the Budget. Committee chairman Andrew Tyrie said: "The proposal to grant the power to HMRC to take money directly from people's bank accounts is very concerning.

"People should pay the right amount of tax. 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."

A Committee report explained this point further: "This policy is highly dependent on HMRC's ability accurately to 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. These might include the award of damages in addition to compensation, and disciplinary action in cases of abuse of the power."

The Committee is calling for independent oversight before any tax grab could take place - by a new ombudsman or tribunal, or through the courts - and for a "lengthy and full" consultation on the proposal. It intends to take evidence from HMRC on the matter "shortly".

More about

Your Comments

I agree with HMRC proposal in principle as long as all other avenues to collect the tax owed have been exhausted and there is full compensation for all out of pocket costs incurred where HMRC takes money they are not owed.  After all it's the people who can pay but won't who increase the burden on those who do pay.