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The Budget announced that HMRC’s powers are to be increased, allowing them to seize cash from the bank and building society accounts (including ISAs) of tax payers.
This Direct Recovery of Debts will apply to those who owe over £1,000 in tax or tax credit debts and have been contacted “multiple” times to pay. A minimum aggregate balance of £5,000 will be left across the taxpayer’s accounts after the debt has been recovered.
The Government states that this will modernise the recovery process and bring it in line with other tax authorities including France and the US.
Consultation on this proposal is due to start shortly. We expect there to be lively debate and will keep you up to date with any developments. The Government aim to legislate for these changes in Finance Act 2015.
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