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Tax reclamation powers increased

30 Sep 2014

Debt recovery powers for HM Revenue & Customs (HMRC) are set to allow up to 17,000 in unpaid tax to be taken directly from salaries.

Currently, HMRC is able to take back up to 3,000 worth of debt from a debtor’s pay packet.

The 14,000 rise has prompted strong reactions, particularly from high-earners whom this new measure will affect most of all. Those earning less than 30,000 per year will only be subject to the original 3,000 reclamation limit, while a sliding scale means those earning over 90,000 will face the new 17,000 limit.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA), said: ‘This is another creeping of HMRC’s powers which are skewed in favour of themselves and away from the taxpayers. HMRC is becoming a more confrontational and all-powerful organisation’.

The new measure is hoped to raise 115 million for the treasury.