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Tax debt recovery powers watered down

21 Nov 2014

Recent controversial plans to give HM Revenue & Customs (HMRC) power to take unpaid tax directly from bank accounts have now been limited.

Chancellor George Osborne, following a consultation, has agreed to safeguards in order to prevent the ‘direct recovery powers’ from affecting innocent taxpayers.

David Gauke, Financial Secretary to the Treasury, said: ‘The vast majority of people pay the tax that is due, on time, but there is still a very small minority who try to gain an unfair advantage by persistently refusing to pay what they owe, despite being able to. These are the people who will be targeted by the powers for the direct recovery of debts owed to the Exchequer’.

The new safeguards include the right to appeal to HMRC then, if unsuccessful, through the courts before debts are removed from bank accounts, and face-to-face warnings must be given. A specialist unit will also be set up for cases involving vulnerable individuals.

Mr Gauke added: ‘We’re strengthening the guarantees we can offer taxpayers that the powers will only be used when debtors have consistently refused to talk to HMRC and settle their debts, and their use will be subject to the toughest scrutiny and oversight possible’.

The original plans were outlined to tackle the estimated 17,000 individuals who are thought to owe an average of 5,800 each.