HMRC to access thousands of bank accounts for unpaid tax
Anyone with tax debts is advised to take steps to get their affairs in order or face having their bank account raided by HM Revenue and Customs (HMRC) to recover the amount owed.
Chancellor George Osborne first announced the new powers for HMRC in his March Budget, but HMRC has now clarified how this will work.
It is estimated that around 17,000 people a year will have their accounts accessed by HMRC to claw back unpaid tax. HMRC will target anyone who owes more than £1,000, although the average debt of those targeted will be £5,800.
HMRC says it will only target those who have long-term debts and have already received at least four demands for payment. It will also ensure that those targeted will be left with at £5,000 in total across all their bank accounts once HMRC has taken the money it is owed. It will also freeze the amount owed in accounts for 14 days to allow time for a debtor to pay before the money is seized.
HMRC will have the power to take money from bank accounts, building society accounts and even ISAs. Although it has pledged that it will not leave anyone without any money in their account, clearly taking money in this way could cause problems with budgeting or meeting other expenses, so it has never been more important to get your tax affairs in order as soon as possible.
If in doubt about what you owe, it is always best to seek professional advice at the earliest opportunity. As with any tax matter, it is always better to act sooner, rather than later.
For further information, please contact Stuart Hinnigan.
Author: Stuart Hinnigan FCA CTA
Stuart’s career in accountancy began when he joined Preston based Moore and Smalley in 1994 following his graduation from Lancaster University. He qualified as a Chartered Accountant in 1997 and then chose to specialise in...
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