There has been a recent well documented news story doing the rounds, about how HMRC have requested power to trawl through your personal bank accounts to retrieve any unpaid taxes. The HMRC plan involves them being able to access monthly copies of bank, ISA and joint account statements, in order to check income flow, so that when HMRC are ready to collect money from your account, they know you will have the money available.
HMRC chief executive, Lin Homer, has spoken out about how the powers are needed to target 17,000 ‘recalcitrant debtors’, and that the plan involves the following steps:
• Under the requested new powers, HMRC would contact people who owe money up to nine times; and if they fail to respond, their bank account would be frozen for 14 days.
• During this 14 day period, tax officials would access up to a year’s worth of bank statements to assess whether the person can live on what money might be left if their taxes are taken from their account.
• HMRC would then take the figure owed to them, but have said they would leave £5,000 in accounts once the debts had been removed.
It’s a proposal which has divided opinion, and clearly, many people are not happy with the idea of such a proposition being given the green light, especially allowing HMRC such intrusive powers, of being able to look at your bank account. Being a firm of accountants, we obviously deal with HMRC on a regular basis, and errors can and often do, take place. By allowing HMRC to take money direct from people’s accounts, what will be the consequence of any mistakes which take place? Imagine logging onto your online banking on a Monday morning to find £3,000 had been wrongly deducted from your account by HMRC and because of this, you had missed some direct debits; would HMRC cover any bank charges you may incur because of their error?
The other side of the argument is that HMRC are saying they will only target ‘recalcitrant debtors’ who owe large amounts and have been in contact with HMRC about the debt, but are still refusing to pay. HMRC also argues that it only wants to look at the bank statements in order to make sure that a person will not suffer hardship after the money is removed to pay the tax debt, and that the people they wish to contact can afford to pay the debts anyway, but are choosing not to. If this is truly the case, then surely it is a good idea to get people, who owe money, to pay up and clear any debts, like the majority of the British public already do? Also, why should these 17,000 people get away with not paying their taxes, if they do have enough money in the bank to clear them?
Another aspect of the argument to consider is whether HMRC’s new powers will go against the Magna Carta by allowing it to seize money without needing the permission of the courts. Article 39 of the Magna Carta states: ‘No free man shall be seized or imprisoned or stripped of his rights or possessions… nor will we proceed with force against him or send other to do so except by the lawful judgment of his equals, or by the law of land.’ Surely by taking money out of peoples bank accounts without permission HMRC are breaking the fundamental principles of justice, fairness, and human rights?
Which side of the fence are you sitting on? Do you agree with HMRC’s idea, or do you think it is a clear invasion of privacy? Leave your comments below.