By Lyndsey Hall
According to the UK tax authority, in an article by the BBC “an estimated 17,000 people a year will have their accounts raided for unpaid tax under new rules”.
You may remember Osborne making reference in the Budget to new powers allowing HMRC to recover tax debts from the accounts of anyone owing more than £1,000, either in tax or as a result of tax credit overpayments. Well, the Revenue has recently revealed the limits to their new found powers, which are:
- HMRC must only target those who have long-term debts and have received at least four demands for payment
- It must ensure that at least £5,000 is left in total across all debtor’s accounts, including savings, building societies, and even ISAs
- The funds must first be frozen for a 14 day period, allowing the debtor to pay before the money is seized
The average debt of those likely to be targeted is £5,800, according to the UK tax authority, and in fifty per cent of cases debtors had more than £20,000 in their accounts. The new powers granted to HMRC by the Chancellor were originally slated as being “seriously draconian” by ACCA, but in light of the recently revealed limits that will apply, the accountancy body now admits that they are “less fearsome than first thought”.
What are your thoughts on the latest revelation from HMRC? Do you agree with their new powers to retrieve debts direct from debtors’ bank accounts, or are you firmly against the idea? Let us know in the Comments.
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