Are we leading up to a state-controlled Great Britain?
It was announced by George Osborne in his last Budget that HM Revenue & Customs (“HMRC”) will have powers to collect unpaid tax directly from the bank accounts of debtors, including from ISA accounts.
He stated that “the Government will modernise and strengthen HMRC’s debt collection powers, to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax or tax credits. A minimum aggregate amount of £5,000 will be left across in all accounts, including ISAs, after the debt is recovered”.
Under these rules, if HMRC decides you owe them tax, or you haven’t reached an agreement with them, then they will have powers to collect the debt from individuals’ bank account.
It has now been explained by HMRC how the system will work.
It will target those who have long-term debts and have received at least four demands for payment of the tax. However HMRC will ensure that at least £5,000 is left in total across all the taxpayer’s accounts, including savings accounts, after the unpaid tax is seized.
HMRC will freeze the amount owed in accounts for 14 days to allow time for the debtor to pay before the money is seized.
The plans are still in the consultation process. If they are approved by Parliament, they will take effect from 6 April 2015, and will be incorporated in the Finance Act 2015.
For the time being your bank accounts are safe from HMRC. However, if proposals do become Law, ensure that you do not ignore any letters or demands from HMRC. If they pursue you for tax that in fact is not due, take it up with HMRC without delay or contact your acting agent!Talk to Barnes Roffe today