Just done an interview with HM Customs and Excise about
this story - as written here by the Press Association:
Critics hit out today at plans to allow the taxman to take money straight out
of the bank accounts of habitual non-payers.
In a consultation paper, HM Revenue and Customs (HMRC) suggested officials
could freeze and then remove the amount owed without going through the courts
and even demand cash from the sale of land or property, including homes.
Tax campaigners said the proposals showed a disregard for people's rights and
called for safeguards to be put in place to protect individuals.
At present, HMRC can seize moveable property and sell it to pay tax debts but
has to get permission from a court to collect the money directly from a person's
bank account or to seize property like a person's home.
The consultation document states: "Taxpayers who owe money to HMRC frequently
have sufficient funds or assets to pay their debts, but choose to delay doing
so. HMRC currently lacks the full range of powers to ensure prompt payment."
The report adds that the additional powers "would ensure that taxpayers owing
debts to HMRC cannot escape payment where they have sufficient funds to meet
their debts".
If agreed, the proposals would mean HMRC would have the right to freeze an
amount equal to the outstanding debt within the bank account.
That sum would be paid over to HMRC after a specific period by the bank or
building society if other attempts to collect the debt proved fruitless.
If the debtor owns land or buildings, HMRC could demand the tax bill is paid
from the proceeds if the asset were sold. Meanwhile, HMRC would continue to
pursue the debt using other methods.
There would be a right to appeal but the HMRC's report said the large majority
of the 200,000 court orders currently sought each year for unpaid tax are
undefended.
The report also pledges the HMRC would take into account the effect action
would have on the debtor's ability to pay ordinary living expenses, in the same
way a court would.
But some tax experts have raised concern over the proposals.
Dr Eamonn Butler, director of the free-market think tank Adam Smith Institute,
said: "An interesting, ancient feature of Britain's common law was that when
people fall into debt, most of their goods could be sold - but not their home,
their bedding, or the tools of their trade.
"The law realised that people would never get out of debt if these things were
denied to them. But who cares about ancient rights, or such common-sense any
more? Not our over-mighty officials."
John Whiting, chairman of tax policy at the Chartered Institute of Taxation,
said: "We need to make sure that if Revenue and Customs has the powers, we have
the safeguards. It needs to be a fair package on all sides.
"We need to know where the line is and what are our powers to fend the taxman
off."
Matthew Sinclair, spokesman for the TaxPayers' Alliance, said: "HMRC wants to
circumvent tried-and-tested court procedure that prevents unlawful seizure.
"People should be wary of bids for new powers like these because the tax man
has always maximised revenue and then dealt with questions and complaints
later.
"This measure moves the onus from them, to get the required permission from a
court, on to the individual taxpayer who must lodge any appeal of unfair
treatment afterwards. It is a step too far."
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Could this be your longest posting ever, Eddie? ;o)
Eddie - can I just point out (as it states several times in the quoted article) that the name of the organisation in question is Her Majesty's Revenue and Customs. HM Customs and Excise ceased to exist when it was merged with Inland Revenue to form HMRC.
Sorry...
;o) []
It took me twenty minutes to read this entry, Eddie.
Lots of other online "news" sites just reproduce releases from the likes of PA, never thought I would see it here *sigh*
;-)
Matthew Sinclair, spokesman for the TaxPayers' Alliance, says...
"This measure moves the onus from (HMRC), to get the required permission from a court, on to the individual taxpayer who must lodge any appeal of unfair treatment afterwards. It is a step too far".
An understatement.
I wonder, would a dispossessed tax-debtor who needed/wanted to appeal get Legal Aid..?
And, if subsequently found by the Courts (probably some years later) to be innocent, where would the innocent taxpayer's property then be?
What if a wrongful seisure of assets caused a family break-up? Loss of income and means of support for an innocent "family"...
And, presumably, in the event of a successful appeal, it would be left to the tax-payers in general to provide compensation. Which would likely be substantial...
Also, a PRESUMED tax debtor may have a partner and/or children entitled to a share of the property to be seized, especially if it is the family home. Then what? Will the partner &/or children be able to obtain appropriate legal aid in order to protect their interests and rights..?
What a wonderful scheme! Thank God our government employs such clever people to dream-up crack-pot ideas that over-ride Rules-of-Law British Courts have laid-down, with good reason, over centuries.
Well done, Piper. It was another organisation (the CSA) that caused a great deal of trouble by trying to override settlements agreed in court. I wonder if HMRC would need an IT system to help them do their stuff.
I pay my taxes. Is it too much to expect everyone else to pay theirs?
Can't understand why people are so bothered. If you have arranged direct debits, then the organisation to whom you have given access appear to feel they can help themselves - mainly BT, but the principal holds, you, or one, has no control over what is taken and can only react.
Ian (7), no it's not too much to expect.
But equally you might not be too happy if due to an error you suddenly found large amounts of money removed from your account which you then had to claim back.
Legal processes are usually there for a reason and I'd be far happier to have the taxman wait for due process, than innocent victims bankrupted. As has already been pointed out compensation would then cost the taxpayer money, so no overall gain I suspect and lives destroyed in the process.
Looks like we're heading for the equivalent of the U.S."Racketeering" law.
The U.S. Government couldn't prove Al Capone was guilty, so things were turned around so he had to prove he was innocent. Trouble is, that law applies today to all US citizens.
There's no Statute of Limitations applicable to enquiries/actions initiated by HMRC. Now, what did I do with my Bank statements, invoices, receipts, from 25 yrs ago..?
I wonder why we don't now also, just give HMRC the power to imprison people immediatly on the HMRC's say-so. It would seem to be their next likely step.
Since the HMRC really messed up the Family Tax Credits through overpayments, underpayments and non-payments, I dread to think what they could do if they automatically had access to everyone's bank accounts - time to keep your dosh under the mattress again I guess!
This needs to have the kibosh put on it pronto.
Without judicial oversight HMRC [NOT HM Customs and Excise] will be judge, jury and executioner.
And ALL organisations make mistakes from time to time - just look at the scenario with bank charges.
This is definitely a case of HMRC over-extending their reach over our lives.
As has been mentioned if you have DD set up that organisation can take whatever money it wants from you. So to stop HMRC doing this then we have to go back to paying them with CASH. That is so inconvienient but if they don't have the bank details I doubt they can take the money from your bank.
Totally unacceptable!
Oh dear !! I am listening to this guy and he doesn't have a clue !! I don't trust him at all !!
He is thinking of using this for sums over £ 100 which will just force people back to the black economy.
The guy just doesn't sound competent, and now that the Inland Revenue have merged with the much more aggressive Customs and Excise, well - this is a slippery slope.
In my former life a chartered accountant! Letting HMRC take money out of your bank account is a very bad idea.
Estimates range about the mistakes made by HMRC . Many people find HMRC very intimidating and find them difficult to work with.
Most people need help when taxman gets difficult.
Why not a court order?
Just another BIG BROTHER intrusion. What about the little chap in business who wants to pay his PAYE and VAT on time, but their customers who take up to 75 days to pay their bills make that impossible. I see a huge increase in unnecessary bankruptcies and grief. What about the caring side of HM Customs & Excise? - it doesn't exist!
Since I recently heard a SCARY programme on Radio 4 showing just how difficult it is to sue the HMRC if they wrongfully take money from you, I think it is a really bad move to let them do it without going to court first. They aren't accountable enough as it is, without giving them even more power!
The tax people, whatever they're called, owed me about £500 for six years. I asked for it regularly twice a year and all I got was forms to fill in that didn't apply. I finally wrote to the Chairman of the Board and got my money within a couple of months. Have a complaint? Go to the top.
alice
I've just spent 10 mins on the HMRC website. They don't seem to be too keen on comments as I cannot find any link to make a comment on this outrageous suggestion.
Dur to inneficiencies of the Revenue I underpaid tax. I was charged 2percent over base rate for the 'benefit' of having had their money. When I overpaid they paid interest at 2 percent UNDER base rate. When I complained about this I was told that 'the chancellor needs the extra interest'!!
No WAY should they be allowed to do this
In a week when the new PM has made very sensible proposal about curbing the power of the State, HMRC undermines his efforts. Butter would not melt in the mouth of the HMRC spokesman, but he's asking for powers that are for the courts. The courts are the right place for decisions of this importance, not the State. And note HMRC is thinking about using these powers for sums as small as £100. The average citizen must have the protection of the courts from an over-zealous executive.
I have been a tax adviser for almost 20 years. Recently H M Revenue & Customs attitudes to both taxpayers and advisers has hardened and has become far more confrontational. I want people to pay their tax - there are plenty of can pay but won't pay people out there - but only if there are sufficient safeguards on place to prevent terrible mistakes occurring. I am afraid I have no confidence that this will be the case.
Sorry to go on - but I am bl**dy cross about this eejit David Hartnett.
1/ He hasn't asked me for my opinion, or told me how to voice my opinion.
2/ He has given no assurance that he will give any weight to my opinions, even if submitted.
3/ He was trying to spin the line that this was for very wealthy people who 'wouldn't pay' their tax.
Given that his starting point will be a mere £ 100 is this not totally disingenuous ?? Is it not far more likely that it will be poor people who cannot pay !
To steal the style of Android Bean Counter (7), in my former life a Civil Servant for 28 years!
There's no way on Earth I'd trust any part of the state to take the right amounts, at the right time, from the right account when they are dealing with millions of taxpayers. They are certain to get many wrong, and there is a long and embarassing past history of getting government departments to admit to, and correct, mistakes. It should surely have taught people by now that it's very unwise to let them loose like that.
If someone owes me money, I can take them to court. There should be no difference just because it's the Crown claiming that I owe them money.
what you have to remember is that jo average public is an easy target for the tax man and it's like shooting fish in a barrel. it's much easier than going after criminals who live in big houses that have earnt their money through criminal activity because it takes time and effort. hmrc are completely morally bankrupt and are only concerned with collecting as much money with minimal effort. which is why drugs are flooding into the country.hey, class A drugs are not grown here they have to be imported - when did you last see a customs officer at a port or airport? don't believe all the politician's bull either about drugs - we've lost the battle.
HMRC already have too much power and too little responsibility. They constantly act in error and then refuse to admit their mistakes. If they are granted the powers they say are vital, the first mistaken seisure of assets will such a cause celebre that it could possibly bring down a Gonvernment.
The inland revenue have today informed me that I am dead and sent a form for my representative to fill in "POTENTIAL REPAYMENT TO THE ESTATE" to finalise my tax affairs.
What a prospect?get up, try your best to better yourself ,be honest as you can,then you could be crushed like an insect by a charming overpaid Civil Servant who believes you are as corrupt as them applying these inane laws.
as a former tax accoutant I have to agree with everyone who says this is a BAD idea. Twenty years ago staff in the Inland Revenue were trained and knew what they were doing.These days hardly any of the staff are trained properly as there is an over reliance on machine read tax returns with a corresponding perception that the staff need to know almost nothing. This leads to huge problems, not surprisingly.
HERE is a myth that countries must compete to attract foreign investment by cutting tax rates for companies and by offering other tax-based incentives. There is no evidence for this claim.
In fact, strong public investment in education and skills training and in transport infrastructure is more important.
The 2005 OECD Economic Survey of the UK recommended that the government should "raise the general skill level of the workforce" and "improve transport infrastructure ... an unreliable rail system, which may be holding back productivity."
This analysis was echoed by the European Competitiveness Index, which found that those regions ranked bottom "lacked the economic and industrial infrastructure that is a feature of Europe's most competitive regions" and that the most successful region had "unique levels of public-sector investment."
Tax competition does not improve productivity, but simply increases the returns to capital by enabling companies to free-ride on public services. Business benefits greatly from public services, enjoying a healthy, educated and productive workforce with the financial means to buy the products of business.
Public finance for public investment is very much cheaper than alternative private investment, such as the extremely expensive PFI schemes.
Recent academic analysis by Manchester University suggests that PFI schemes committed so far will cost the taxpayer £93bn more than the equivalent public investment. Moreover, there is no rational case for holding down public investment and seeking to replace it with private finance. Britain is alone in its obsession with private finance and opposition to government borrowing for investment.
If the British government simply functioned at Sweden's level of debt, this would provide another £110bn for public investment. There would be no difficulty borrowing to these levels, as the money markets are always happy to lend to government at low rates of interest because such lending is secure and risk-free.
Very successful economies such as Sweden not only have much higher levels of taxation funding much higher levels of public expenditure but also maintain much higher levels of public borrowing. There is absolutely no logic in Britain insisting on expensive private investment instead of cheap public borrowing, any more than there is for holding down public expenditure and taxation as a proportion of GDP.
But the debate about public expenditure cannot be divorced from the equally important debate about how the money is raised. Over the last 10 years, there has been an excessive and widening disparity in incomes between the rich and poor. By adhering to Thatcherite tax policy, the Blair administration is the only post-war Labour government that has overseen an increase in inequality.
Even with various reforms, the poverty rate for working adults remains at 19 per cent. A clear majority of the population believes that the government has a responsibility to reduce inequality.
It is generally assumed that our present tax system is progressive - in that it takes a higher proportion of the incomes of the rich than the poor.
This is only true, however, of direct taxes on income and wealth, primarily income tax. Indirect taxes such as VAT or taxes on alcohol and tobacco fall more heavily on the poor. In 2003-4, indirect taxes took 28 per cent of the income of the poorest fifth of households, but only 11 per cent of the top fifth. This more than offset the fact that the poorest fifth paid 10 per cent of their incomes in direct tax, as compared with 25 per cent for the top fifth. Over the income scale as a whole, the tax system is at best proportional rather than progressive.
Another highly regressive tax is council tax, which the Left Economics Advisory Panel of radical and Labour economists advocates should be abolished and replaced with a land value tax (LVT).
The poorest 10 per cent of the population currently lose 9.1 per cent of their income to council tax, whereas the wealthiest 10 per cent lose only 1.5 per cent. LVT would replace council tax and national non-domestic rates at a rate of approximately 1 per cent of capital value, with the revenue going to local authorities. Owner and tenant-occupied homes will be entitled to a home allowance, setting a threshold before LVT is charged.
To pay for necessary public spending increases, additional revenues beyond increased taxes on the rich will be required. There are a number of potential sources of this additional revenue and a good first step would be to close the enormous "tax gap" between tax actually paid and that which should be paid.
A concerted attack on tax evasion and avoidance is essential. Together, these contribute to the tax gap, which has been estimated at between £97bn and £150bn a year.
Even a modest dent in these vast sums would bring considerable benefits to Treasury funds
What the tax spokesman didn't say is that some people just willnot pay their taxes no matter what Why should solicitors accountants get fat fees at the tax payer's expense because of these bloody minded individuals. Keep the costs down AND remember if every one payed their tax we would all pay less thus these people are robbing you
I have personally never had any trouble of any kind with any tax office -- I throw myself on their mercy, ask for their help, tell them that they know what they are doing and I don't, and I suspect they are so astonished that they move heaven and earth to help me -- but I still feel that there is something very wrong with the idea of *any* organisation having the power to take money entirely at their own discretion from *anyone's* bank account without advance warning. Apart from anything else, if it happened to take someone into being overdrawn it would cause them trouble with the bank and take ages to sort out, if it ever could be.
As for the VATmen, I have been told that it has always been the case that they had far more powers to invade my house and confiscate my property than even the police. With all the new legislation this may no longer be the case, but shopping someone to the VAT used to be regarded as the worst thing one could do to them short of physical mayhem.
Chris (32)
You've obviously never dealt with HMRC Wrexham then! I used to fill in a Self Assessment form whilst I was at Uni. They were always in on time and there was never usually a problem. Then one of mine was randomly selected for additional checking. After an aspect inquiry during which I was called a liar, the Wrexham lost my bank statements, denied they'd ever had them and required me to pay for replacements and FINALLY managed to send all my personal documents back "recorded delivery" to a complete stranger I lost all confidence in them. I called on one occasion to be told that all my documents were in one place on a windowsill in their office.
I have since found the odd one or two who are helpful to a fault. One of these managed to work out that rather than underpaying £200 (as Wrexham stated) I had overpaid £300. It took more than a year to sort out the mess. I did get the money back eventually but the very thought of this shower having access to funds in my bank account makes me shudder.
I agree that those who fail to pay their dues are cheating us all. I just think that there have to be better ways of dealing with this minority.
HMRC seem to regard the fruits of our labours as their personal fiefdom and that we work hard purely to pad the HMRC bank account.
Yes I know that people shouldn't avoid paying their taxes - I don't, but I'll get more upset about non payment when the state doesn't waste billions every year (How about £120 billion on quangos for starters? No doubt HMRC will come over all Sir Humphrey like and say "Its not for me to make policy - you must ask the minister").
This is yet another case of our liberties being chipped away bit by bit. One day we'll wake up and realise that we have all become slaves, but it will be too late.
I also think this is a very bad idea.
CONFESSION TIME: In another life I worked for HMRC (pre merger).
HARSH REALITY TIME: A sizeable number of the people I worked with were fairly stupid and the majority treated the public as 'other' and with great distrust. I would not want any of these people to have access to my bank accounts.
I am delighted by the suggestion that HMRC can take money straight from bank accounts. As a lawyer involved in tax issues, I can see a whole new area of work opening up in front of me.
Often the amount of tax that is to be paid is a matter of interpretation of tax statutes. The Revenue always takes the view that tax is due. There is, conversely, often an argument that tax is not due.
Presumably, if there is some disagreement, the Revenue will simply take the money and expect the taxpayer to "sue for it".
Whilst, as I say, this is good business for the likes of me, it is wholly unsatisfactory in 99.9% of cases.
I was fascinated by the idea that the Revenue does all it can to get the tax right. Clearly, I have missed something. Even if there is no dispute about the taxability, they still cannot be relied upon to get the figures right.
There must be some whole new service being introduced, about whicxh we know nothing.
This is a terrible idea.
Is it too simple and naif to still think that "all Grants and Promises of Fines and Forfeitures of particular persons before Conviction are illegal and void"? [Bill of Rights, 1688]
HMRC should not be given this power. Recently in a change of job I was preseneted with a Notice of Penalty Determination (NPD) for £900. No letters before and when I appealed and won no apologies just the NPD form issued with a £0.00 amount. Because of central phone numbers I was unable to talk to the people who raised the Penalty and it would be the same if they were given this power too. HMRC is just irresponsible!
No way should these people have this power.
Peter Sitch (and other members of the public who moan about the ills of society but do not participate in the democratic processes that exist) you'll find details of the consultation on this gem of tax policy on the HMRC website!
Ella Walsh @ 39, but what Peter Stitch wrote was
"I've just spent 10 mins on the HMRC website. They don't seem to be too keen on comments as I cannot find any link to make a comment on this outrageous suggestion."
so presumably he did *try* to do his democratic duty.
If I had the link, I could go and have a look to see what you are referring to, but I don't. Could you possibly put it up so I can go there?
This is the perfect illustration of how, over the last ten years, the State has changed from being the servant of the people to the owner of the people, much in the same way as it did in 30s Russia or Germany. The sheer arraogance of the public "servant" who proposes that the State is always right and therefore has the right to plunder its citizens just takes one's breath away.
It could be argued that this attitude now runs right through the cosseted public sector at all levels, to the detriment of the individual.