HMRC has published a Briefing setting out the “safeguards” it will implement when seeking to access taxpayers’ bank accounts to recover outstanding tax, or tax credit debts. These are derived from the draft legislation contained in Finance (No. 2) Bill 2015 and associated draft regulations.
The intended safeguards will include not issuing a hold notice until an HMRC officer has had a meeting with the taxpayer. At that meeting HMRC will confirm the identity of the taxpayer and discuss “time-to-pay” options. HMRC also states that it will check that the recovery action will not cause “undue hardship”.
Direct recovery will apply only to those who owe more that £1,000 and will be left with £5,000 in their bank account after collection. HMRC says that it will offer support to people it identifies as being vulnerable.
Briefing notes do not have the force of law. This draft legislation, if enacted as drafted, will provide HMRC with a significant new power. Many of the concerns of the professional bodies which have responded to consultations on this legislation appear to have been ignored and it remains to be seen how frequently HMRC will utilise this power and against whom.
The Briefing can be read here.