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News - 26 March 2014

How and when the Chancellor can take from your bank account

In his budget speech, the Chancellor, George Osborne, gave powers to HMRC that can allow them, under certain circumstances, to recover money (over £1,000) they think is owed to them in tax by removing the cash directly from our bank accounts.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“This brings the UK in line with many other tax authorities, such as France and the US, in being able to recover debts directly from an individual’s account, but only if they have been asked "multiple times" by debt collection officials to pay, and must leave at least £5,000 in the account.”

Once HMRC takes the money, the taxpayer will have 14 days to get in touch and set up a payment plan, otherwise officials will keep what they have taken.

The Budget also gave HMRC the power to take money from those they suspect of unfairly avoiding tax, with money only handed back - with interest - if the taxpayer wins a legal challenge in the courts.

Dr Eamonn Butler, director of the Adam Smith Institute said:
"If we allow the authorities to take cash from our accounts for any amount they think we owe them, then none of us is safe. They become a law unto themselves. This is a very worrying threat to civil liberties.”

Emma Carr, deputy director of Big Brother Watch, warned: "Today the taxman has to go to court to size your money. Now he'll be able to do it with a click of a mouse.”

Richard Murphy, director of Tax Research UK, said: "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. The other is taking payment when the debt is disputed. That is unacceptable.”

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“This law has to be administered independently of HMRC or there is real risk of abuse. The police still need warrants to seize property or cash from criminals under the Proceeds of Crime Act. But if this law goes unchecked, people with debts to HMRC are going to have fewer rights than criminals."

If you need any help and advice on Personal or Corporate taxation and Reporting, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar now to discuss how ABDS can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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Great with people  
Clear and precise with advice
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In touch with issues that face our clients
Mindful of our client’s long term strategic goals

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