Concerns over new tax powers in Budget

Chancellor George Osborne has outlined new plans in this year’s Budget that will allow the tax authority to settle unpaid demands by taking money from people’s bank accounts. Under the new plans, HM Revenue and Customs (HMRC) will be able to recover tax debts from anyone who owes more than £1,000 in tax or in tax credits. The Treasury Committee has raised concerns over the new plans because tax officials in the past have failed to accurately calculate tax bills and have a history of making mistakes. Andrew Tyrie, committee chairman, said “People should pay the right amount of tax. But HMRC does not always ask for the right amount,” “Some taxpayers may find money taken from their accounts that later should be paid back. That would be unacceptable.” The committee also had “deep reservations” about changes to tax policy that would require upfront payment of any disputed tax associated with tax avoidance schemes. HMRC has specified that it will only target those who have long-term debts and have received at least four demands for payment and will ensure that at least £5,000 is left in total across all debtor’s accounts, including savings accounts, after the unpaid tax is seized. The plans are now going through a consultation process. If approved by Parliament, they will take effect in 2015-16. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with tax law Solicitors in Douglas and across the country.