HMRC Direct Recovery proposal... "we will TAKE what we want"

[BoRED S2upid]

If this was law could they claim the tax owed by the likes of Amazon, google, Starbucks etc...?

[Simpo Two]

BoRED S2upid said:

If this was law could they claim the tax owed by the likes of Amazon, google, Starbucks etc...?

I thought they used a loophole, ie it is not owed. But if they do have to pay tax, you will pay more for their services as they claw it back from Johnny Punter.

[Eric Mc]

Quattromaster said:

Company nr to myself have just taken HMRC for 290k in unpaid tax and paye, into liquidation one day, trading under another name the next, owner still living in a big house and driving a full fat Range Rover.

And already told me the paye debt is piling up again.

The system is a joke.

And HMRC dipping into the bank account ahead of all the other creditors (including those who have an a priori right to their debt) would solve what, specifically?

[JonRB]

Eric Mc said:

And HMRC dipping into the bank account ahead of all the other creditors (including those who have an a priori right to their debt) would solve what, specifically?

Indeed.

Company goes bust, staff's final wages go unpaid because HMRC got their trotters into the company coffers first and snarfed all but £5000.

Or, worse, company is in dispute with HMRC over a miscalculated tax bill, HMRC get their trotters into the company coffers and snarf all but £5000 anyway, company goes bust and staff lose their jobs and there is also no money to pay their final wages.

[Fotic]

Eric Mc said:

Quattromaster said:

Company nr to myself have just taken HMRC for 290k in unpaid tax and paye, into liquidation one day, trading under another name the next, owner still living in a big house and driving a full fat Range Rover.

And already told me the paye debt is piling up again.

The system is a joke.

And HMRC dipping into the bank account ahead of all the other creditors (including those who have an a priori right to their debt) would solve what, specifically?

It might stop companies operating like that in the first place perhaps? Or drawing them to a close before the creditor list gets too long?

I don't know why I'm defending the HMRC here really! I think it's just that I see a lot of tax dodgers in my industry and would relish them not being able to do it.

[PurpleMoonlight]

You only have to look at the now defunct CSA to see how this could easily go horribly wrong.

[Eric Mc]

Fotic said:

It might stop companies operating like that in the first place perhaps? Or drawing them to a close before the creditor list gets too long?

I don't know why I'm defending the HMRC here really! I think it's just that I see a lot of tax dodgers in my industry and would relish them not being able to do it.

It won't change a thing - except make life very difficult for "normal" creditors. The rogues don't care who they don't pay. They'll happily not pay an ordinary Joe as soon as not paying HMRC.

[markcoznottz]

With regard to the likes of Starbucks, if the government hadn't seen used them as easy money, soaking then for tax and NI, they wouldn't have needed so much creative accounting.

[Lost soul]

Eric Mc said:

So?

Just because other countries allow government agencies to behave in such a way does not mean we should here.

I am not saying we should I am saying they do and that its not a new idea

[Eric Mc]

It is for the UK.

Up to now, the tax authorities have essentially had the same powers as a normal creditor. This new law gives them special powers which usurps the rights of other creditors - including those who have a legal priority over HMRC.

[mph1977]

Eric Mc said:

In many cases - perhaps even the majority of cases - it is likely that the amounts HMRC sequester for themselves may not be finalised amounts or may be subject to appeal.

What HMRC are actually saying is -

"stuff the courts
stuff legal procedures
stuff the ranking creditors

What we want, we will take and you can argue the toss later"

I don't expect the UK to be run in this manner.

the primary difference seems to be that the HMRC can just go direct tothe bank accounts , as if you beleive the robojudges at Northampton hear every case put to them ditto when the robojudge is wheeled out for council tax and HMRC sessions locally ...

[Eric Mc]

The point is that HMRC do not make that many court applications - so the incidences where they can take money out of a bank account directly are currently fairly rare.

The new rules would wipe away any restrictions so you would expect the incidences of them seizing whatever cash they fancy will shoot up.

Let's face it, if they were getting what they wanted now, they wouldn't be trying to change the law.

[JonRB]

If HMRC had their way, the Self Assessment tax form would be as follows:

1. How much money did you earn last year?
£__________

2. Give it to us.

Note: If you do not, we will take it anyway.

[PugwasHDJ80]

BoRED S2upid said:

If this was law could they claim the tax owed by the likes of Amazon, google, Starbucks etc...?

Please don't beleive the hype- the multinationals tax affairs are entirely correct.

giving HMRC extra powers will not solve this particular question, only changing tax law.

As to giving HMRC direct control- Eric Mc is spot on, giving them even more power would scare the crap out of me. Anyone who has ever had VAT inspections will know what HMRC are like. They are not a benign organisation- they are filled with as many petty, difficult, controlling people as you find in any walk of life- its just they have the power to enact some of their control.

[Simpo Two]

Eric Mc said:

The point is that HMRC do not make that many court applications - so the incidences where they can take money out of a bank account directly are currently fairly rare.

The new rules would wipe away any restrictions so you would expect the incidences of them seizing whatever cash they fancy will shoot up.

I see a parallel with the 'decriminalisation' of parking offences. Sounds a great idea - until you realise that it actually means control of parking passes from the police - who knew it was petty and generally not worth the time - to local councils. And suddenly legions of camera-wielding numpties patrolled every street.

[JonRB]

PugwasHDJ80 said:

Please don't beleive the hype- the multinationals tax affairs are entirely correct.

Quite. Always amuses me when people moan that the likes of Vodafone haven't paid any Corporation tax for years - completely failing to understand that the government stiffed them for billions for 3G licenses when they were sold, which are allowable operating expenses, and hence deductible from pre-tax profit, and Corporation Tax is on profits not turnover.

(I'm sure I will be corrected on the details of that, but that's the Executive Summary as I understand it)

[Guerrero]

Eric Mc said:

Why should HMRC have a greater priority to the tax they THINK they are owed over a normal creditor such as a supplier?

A supplier who doesn't get paid, just stops supplying to prevent the debt getting any larger. I suppose HMRC could just stop a company trading to stop the tax debt getting any larger.

[Simpo Two]

Guerrero said:

Eric Mc said:

Why should HMRC have a greater priority to the tax they THINK they are owed over a normal creditor such as a supplier?

A supplier who doesn't get paid, just stops supplying to prevent the debt getting any larger. I suppose HMRC could just stop a company trading to stop the tax debt getting any larger.

Thereby preventing it from getting the means to pay the tax... splendid. Even Lenin wouldn't have been that dumb.

[JonRB]

Pertinent article from the Telegraph from a few weeks ago:
http://www.telegraph.co.uk/finance/personalfinance...

[Eric Mc]

Yes - those type of PAYE error cases would be right in the firing line for HMRC to "take before the correct liability is established".

Another issue that the article raises is the use of Extra Statutory Concession A19 (or ESC A19 as it is usually referred to).

When HMRC has all the correct information in front of it and STILL manages to issue incorrect PAYE codings, at what point is HMRC responsible for any tax shortfalls subsequently generated?

HMRC's opinion is that they are NEVER liable for any tax errors - it is always the taxpayer's fault.

Therefore, if a taxpayer has underpaid tax, in their own opinion, HMRC has every right to chase the taxpayer for the missing tax EVEN THOUGH THE TAX SHORTFALL IS LARGELY DOWN TO HMRC INCOMPETENCE.

Raiding the poor taxpayer's bank account to recover the underpaid tax is something HMRC will love.

By the way, HMRC were all set to abolish ESC A19 but had to back off.