A committee of MPs has expressed concerns over new HMRC powers to raid bank accounts for outstanding tax debts.

The Treasury select committee, led by Tory MP Andrew Tyrie, described the proposed powers as “very concerning”, due to the potential for HMRC to wrongly seize funds.

Concerns stem from HMRC’s terrible track record for making errors.

The committee said:

“This policy is highly dependent on HMRC’s ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past.

“Incorrectly collecting money will result in serious detriment to taxpayers. The government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity. These might include the award of damages in addition to compensation, and disciplinary action in cases of abuse of the power.”

Chancellor George Osborne has said that the measure can be justified due to the existing power of the Department for Work and Pensions to seize money for child maintenance.

The committee said that this was not the same as the HMRC proposed powers, because the DWP acts as an intermediary, whereas HMRC would be acting in pursuit of its own objectives.

After the budget, the Association of Chartered Certified Accountants branded the plans “seriously draconian” but have now concluded they are “less fearsome than first thought”.

Image by Flood G.