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HMRC’s controversial new direct recovery of debt power and its in-built safeguards.
KEY POINTS
- F(No 2)A 2015 introduces the power enabling HMRC to collect tax debts direct from taxpayers’ bank accounts
- HMRC can obtain information from banks to facilitate decisions about the power’s use before banks are instructed to hold funds for HMRC.
- Funds are paid to HMRC only after all representations and any subsequent appeals to the county court are resolved.
- HMRC must generally leave at least £5 000 in the accounts and consider vulnerable taxpayers’ positions.
- Time to pay arrangements should be considered to manage cashflow issues that make it difficult to pay HMRC on time.
Proposals to introduce a direct recovery of debt (DRD) power have been on the political agenda since the 2014 budget speech.
It was then that the chancellor George Osborne announced that the...
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