First MPs, then the Forum of Private Business and now tax professionals have come out to criticise Government plans for further HMRC power.

The proposals, which recently received Royal Assent, would grant HMRC the ability for the tax man to take money from people and business’s bank accounts with no external checks. This is to combat tax evasion, although the new rules would let HMRC take the cash before a case has been decided.

If HMRC were found to be incorrect, they would then pay back the money with interest. In the meantime though, the person could have been severely out of pocket, with the Forum of Private Business saying this will disproportionately affect small business.

Two bodies, the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) have said there should be more judicial oversight when HMRC, or any Government body, wants to take money from a person or business’s bank account.

Anne Fairpo, CIOT President, said: “HMRC argue that they need special powers to recover debts directly because the court system is too slow and expensive. This criticism has some justification. But it applies equally to private individuals and businesses who are owed money.

“It is an argument for the Government to reform the court process for all so that small claims can pass through it in a more efficient and less costly way, rather than providing special powers to one body to circumvent it. It would be preferable to let tax tribunals give an ‘express form’ of judicial oversight if County Courts cannot be improved upon.”
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