Controversial plans that allow HM Revenue and Customs (HMRC) to raid bank accounts to collect tax debts have been revised by the Treasury.
Under the revised plans, taxpayers will have longer to appeal before any raid. Announced by George Osborne in the Budget, the powers allow HMRC to seize assets from anyone who owes more than £1,000 in tax or tax credits, subject to certain safeguards. But the proposals attracted criticism from banks, MPs and debt charities.
The revised plans also mean that HMRC will have to hold face-to-face meetings with debtors first before taking any money from their accounts. And under the original safeguards, HMRC said it would not empty debtors' bank accounts completely, but leave at least £5,000 in them.
"It's a good day for taxpayer confidentiality," says Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA).
"While ACCA would have preferred the power were not being proposed at all, we consider where we are today is light years better than what was originally being proposed."
Mr Roy-Chowdhury welcomed the fact that vulnerable taxpayers would be "identified and taken out of the process entirely".
Judicial review
Under the revised proposals, the appeal process will be extended from 14 days to 30 days, the Treasury said. Debtors will have the right to appeal first to HMRC, but if they are still unhappy they will be allowed a further 30 days to appeal to the County Court for independent judicial review.
"Throughout the consultation process, we have maintained that the rule of law should not be undermined," said Anne Fairpo, president of the Chartered Institute of Taxation.
"It is for this reason that we are especially pleased to see changes allowing appeals to the county court."
The Treasury reiterated that these powers would only be used against debtors who had consistently refused to engage with HMRC or pay their debts.
"The Direct Recovery of Debts (DRD), announced by the chancellor in the 2014 Budget, is an important tool in helping to level the playing field between those who pay what they owe, when they owe it, and those who do not," said Financial Secretary to the Treasury, David Gauke.
"Only debtors who have received this face-to-face visit and are not identified as vulnerable, have sufficient money in the bank and have still refused to settle their debts, or enter an appropriate Time to Pay arrangement, will be considered for debt recovery through DRD," he added.
About 17,000 people are estimated to fall into this category, owing £5,800 each on average. Recovering these debts could return £375m to the Treasury over four years, Budget papers revealed.
But given the new safeguards for debtors, ACCA's Mr Roy-Chowdhury told the BBC: "I would be surprised if more than 1,000 fell into this category within the first year."
bbc.com
Under the revised plans, taxpayers will have longer to appeal before any raid. Announced by George Osborne in the Budget, the powers allow HMRC to seize assets from anyone who owes more than £1,000 in tax or tax credits, subject to certain safeguards. But the proposals attracted criticism from banks, MPs and debt charities.
The revised plans also mean that HMRC will have to hold face-to-face meetings with debtors first before taking any money from their accounts. And under the original safeguards, HMRC said it would not empty debtors' bank accounts completely, but leave at least £5,000 in them.
"It's a good day for taxpayer confidentiality," says Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA).
"While ACCA would have preferred the power were not being proposed at all, we consider where we are today is light years better than what was originally being proposed."
Mr Roy-Chowdhury welcomed the fact that vulnerable taxpayers would be "identified and taken out of the process entirely".
Judicial review
Under the revised proposals, the appeal process will be extended from 14 days to 30 days, the Treasury said. Debtors will have the right to appeal first to HMRC, but if they are still unhappy they will be allowed a further 30 days to appeal to the County Court for independent judicial review.
"Throughout the consultation process, we have maintained that the rule of law should not be undermined," said Anne Fairpo, president of the Chartered Institute of Taxation.
"It is for this reason that we are especially pleased to see changes allowing appeals to the county court."
The Treasury reiterated that these powers would only be used against debtors who had consistently refused to engage with HMRC or pay their debts.
"The Direct Recovery of Debts (DRD), announced by the chancellor in the 2014 Budget, is an important tool in helping to level the playing field between those who pay what they owe, when they owe it, and those who do not," said Financial Secretary to the Treasury, David Gauke.
"Only debtors who have received this face-to-face visit and are not identified as vulnerable, have sufficient money in the bank and have still refused to settle their debts, or enter an appropriate Time to Pay arrangement, will be considered for debt recovery through DRD," he added.
About 17,000 people are estimated to fall into this category, owing £5,800 each on average. Recovering these debts could return £375m to the Treasury over four years, Budget papers revealed.
But given the new safeguards for debtors, ACCA's Mr Roy-Chowdhury told the BBC: "I would be surprised if more than 1,000 fell into this category within the first year."
bbc.com
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