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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

Government limits HMRC's powers to seize unpaid tax debt

05 January 2015

Under the new plans, taxpayers will be given the right to appeal through the courts before outstanding debts are removed from their accounts, as part of a number of safeguards. The amendments came after the initiative received a lot of criticism. The Treasury said the new safeguards would ensure that the measure “only catches those who are playing the system”.

The initial plans were laid out in the 2014 Budget to give HM Revenue & Customs (HMRC) the powers to recover unpaid bills from anyone who owes more than £1,000 in tax or tax credits, if it is not protected by certain safeguards. It is expected that 17,000 people with an average tax debt of £5,800 will be targeted and HMRC hope to raise £375 million over four years. Those affected could include individuals such as limited company contractors, umbrella company contractors or sole traders who have not paid enough tax through self-assessment.

However, following the announcement of new restrictions on the direct seizure from bank accounts, taxpayers will now have the right to appeal and HMRC will also be required to hold face-to-face meetings with debtors before ordering banks to pay outstanding debts from their bank accounts. It will also set up a specialist unit to deal with cases involving vulnerable members of society and will set up a helpline.

The changes have been welcomed by a number of groups such as the Low Incomes Tax Reform Group and the Chartered Institute of Taxation (CIOT).

If you are concerned about where you stand on this, please do get in touch with us – we are happy to help.