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

[JonRB]

Just had this email from my accountant. Since it says to feel free to share the email, I will do so...


HMRC DIRECT RECOVERY POWERS

You may have heard that there are proposals out from Government / HMRC to grant HMRC a so called “direct recovery” power.

In essence this would allow HMRC to debit a tax payers bank account for any unpaid tax arrears, without oversight or prior notice. There would be a stipulation that the bank balance must remain at a minimum £5,000 after the debit so as not to dip into peoples business working capital or immediate household funds, but that’s more or less the only safeguard.

These proposals cover business and personal tax debts.

Many people are very worried about these proposals. HMRC already have powers to achieve the same end via the Courts, Direct Recovery cuts out that element of oversight and due process. It could be argued its "efficiency" for HMRC, or from an opposite perspective laziness.

The accounting profession has major concerns over HMRCs administrative capability – simply there are too many erroneous assessments, mistakes and misallocations – and the bottom line is many feel this is a step to far with HMRCs powers.

There is a longer article about some of the problems on Taxations web site:

http://www.taxation.co.uk/taxation/Articles/2014/0... (you should be able to read this without a login)

and a petition on the Government e-petitions web site: http://epetitions.direct.gov.uk/petitions/68384

Can I urge people to consider their response to this issue and

(a) Sign the petition
(b) Highlight the issue to colleagues, family and friends (feel free to share this email)
(c) Consider a letter of objection to your MP.

[JonRB]

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? Don't forget, they don't always know for sure if any tax is actually owed.

If a tax amount is in dispute (which is not unusual), why should HMRC be able to collect any old amount they fancy?

Exactly. That's what is so insidious about this proposal.

[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.

[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.

[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)

[JonRB]

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

[JonRB]

Dicky Knee said:

... and the idea that they can dip into our accounts and take what they want is something everyone should resist.

Not just resist, but wake up in the middle of the night with cold sweats just thinking about.