ACCA labels new HMRC tax raid powers 'seriously draconian'

25th March 2014

The Association of Chartered Certified Accountants (ACCA) has spoken out against new powers enabling HM Revenue and Customs (HMRC) to raid bank accounts to collect unpaid tax, insisting it would be a “seriously draconian” move.
Under the new plans HMRC would have the power to seize assets from anyone who owes more than £1,000 in tax or tax credits.
However, they would only be able to seize money after they had contacted the debtor several times. HMRC would not be allowed to empty accounts either. They must leave a minimum of £5,000 in the account.
The new system was announced by Chancellor, George Osborne at Budget 2014, and it will now be the subject of consultation within the industry, with the ACCA criticising the proposal, indicating that HMRC has a record of making mistakes.
Mr Osborne revealed the new tax raid powers brings the UK in line with a number of other major tax authorities which already have the authority to obtain debts directly from an individual’s account, such as the U.S. and France.
Chas Roy-Chowdhury, head of taxation at the ACCA, believes the UK’s tax collection systems should not be regarded as role models.
Mr Roy-Chowdhury believes the seizure of assets could have dangerous effects; particularly for business accounts, who could find there is not enough in the kitty to pay their staff, for instance.
An HMRC spokesman has insisted that safeguards would be put in place to ensure honest taxpayers aren’t targeted:
“Most people pay their taxes on time, but a minority do not and some refuse to engage with us at all.
“It is wrong that this should hand an advantage to those who simply dodge their obligations, and is unfair on the vast majority who pay their taxes in full and on time.

“We will shortly be consulting on a new measure with appropriate safeguards to help level the playing field, and tackle those who have the means to pay but are choosing not to.

“These are people who have, on average, over £20,000 in their accounts but are refusing to pay their debts. This will only affect a tiny number of debtors whom we have contacted a minimum of four times to ask for payment.”
The spokesman confirmed that those affected would always have the right to appeal against any tax reclaim move.

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