HM Revenue & Customs are to withdraw funds directly from debtors’ accounts.

Continuing the theme of tougher measures to punish and, therefore, deter serial tax avoiders, the government has included measures in the Summer Finance Bill 2015 to enable HM Revenue & Customs to recover tax debts from the bank and building society accounts of tax debtors.

The power can only be used to recover debts of more than £1,000 and is subject to a number of safeguards. Only debtors who have received a face to face visit, have not been identified as vulnerable, have sufficient money in their accounts and have still refused to settle their debts will be considered for debt recovery.

Debtors who are affected by this policy will have 30 days to object before any money is transferred to HM Revenue & Customs and they must be left with a minimum of £5,000 across their accounts. Appeals will be heard in the County Courts but on specified grounds only including hardship and third party rights over the funds in question.

Whilet one can appreciate the need for HM Revenue & Customs to be empowered to recover debts in this manner, we do wonder how much money this is going to cost the government in conducting face to face meetings, court time and all of the associated administration expenses.