New powers allowing HM Revenue and Customs (HMRC) to raid bank accounts to collect tax debts have been criticised as 'seriously draconian' by the ACCA accountancy body. The plans would enable the tax authority to seize assets from anyone owing more than £1,000 in tax or tax credits.
Under the proposals, announced in the Budget by Chancellor George Osborne, HMRC would be able to seize money from bank accounts only after contacting the debtor several times. The authority would not be allowed to empty accounts, leaving a minimum of £5,000.
The ACCA's head of taxation, Chas Roy-Chowdhury, said HMRC had a record of making mistakes and that the seizure of assets could have knock-on effects, such as businesses being unable to pay staff. He also criticised the comparison with tax authorities in France and the US, saying these should not be regarded as role models.
A spokesman for HMRC said safeguards would be put in place to ensure honest taxpayers were not targeted, though details were not yet available. He stated that the measure would affect only a tiny number of debtors who have been contacted at least four times and have, on average, over £20,000 in their accounts but refuse to pay.
The Low Incomes Tax Reform Group also questioned the plans, with chairman Anthony Thomas saying they 'flout the rule of law' and could lead to an abuse of power. He noted that HMRC continually fails to deal with taxpayers properly or fairly, and that the measure would allow HMRC to 'steal a march on other creditors' in bankruptcy cases.
