The Treasury Select Committee finds proposals to issue HM Revenue & Customs with controversial additional powers “very concerning”.
In the March Budget, George Osborne announced plans to allow HMRC to seize cash from the bank accounts of tax payers who owe over £1,000 in tax or tax credit debts.
The Government stated that this would apply to those who had been contacted “multiple” times to pay, and that the plan would modernise the recovery process and bring it in line with other tax authorities such as the US.
Today, the Treasury Select Committee has branded the proposal “very concerning” and has recommended that the Government implements additional safeguards as “incorrectly collecting money will cause serious detriment to taxpayers”. The chairman concluded that “people should pay the right amount of tax, but HMRC does not always ask for the right amount”.
The March Budget also included draft legislation stating that those taxpayers using tax avoidance schemes should pay their tax upfront. The legislation is due to have retrospective effect for some 65,000 tax payers who have used these schemes in the past and have open enquiries.
The Committee has pointed out that the draft legislation contravenes their principal that the Government should only use retrospection in “wholly exceptional circumstances” and as yet, they have not explained what is “wholly exceptional” in this case.
The undermining of certainty is one of their key issues with the principal of applying tax legislation retrospectively, and the Committee believes that the Accelerated Payment Notices could be the start of a slippery slope.
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