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HMRC wants access to bank statements

HM Revenue & Customs plans to ask banks for thousands of customers’ personal bank statements under plans to seize tax directly from accounts.

The Financial Times reports the statements will be handed to HMRC so it can work out how much money it can take out of individuals’ accounts without causing “hardship”.

MPs were told on Tuesday the statements would be checked for “patterns of expenditure”, such as payments of mortgages or salaries, to assess whether an individual should be left with more than the minimum amount of £5,000.

HMRC chief executive Lin Homer defended the measures, which she said were aimed at “a small number of people wilfully not paying their taxes”, in evidence to the Treasury select committee. 

But TSC chair Andrew Tyrie said overall HMRC’s planned new powers remain a “considerable concern”.

The power is currently under consultation, and in its May report on this year’s Budget the committee said the proposal is “extremely worrying and excessive” and should not go ahead without independent oversight.

After a lengthy and at times heated exchange on the issue in an evidence session yesterday in which HMRC tried to defend the proposal to recoup tax from bank accounts and Isas, Tyrie said the committee remains unconvinced.

He said: “The proposal to grant HMRC powers directly to recover money from taxpayers’ bank accounts remains of considerable concern to the Treasury committee in the light of today’s hearing.

“Prior independent oversight is essential. Mistakes could have serious financial consequences for taxpayers, and risk undermining public confidence in HMRC.”

HMRC chief executive Lin Homer said the power would only be applied to around 17,000 people who “simply refused to pay” tax they owed.

She said taxpayers would have a “right to appeal” to a Tribunal ahead of the accounts being frozen and the individual being given 14 days to explain why the debt is incorrect or why they cannot pay ahead of the power is used.

But Tyrie said if that right has not been exercised the decision to recover debts directly from bank accounts would be purely at the discretion of HMRC.

Homer said safeguards for the power were important but disagreed with the committee’s recommendation that there be prior independent oversight of the power.

She said: “I do not think there is merit because it puts us back in the position where these recalcitrant debtors know that there has to be a court order and they keep resisting.”

Liberal Democrat MP John Thurso said he expects Parliament to reject the proposal when it is put to a vote because HMRC wanted to be “judge, jury and executioner”.

Conservative MP Steve Baker said: “I am horrified this power is being taken essentially because HMRC is frustrated with a small minority of people.”



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There are 13 comments at the moment, we would love to hear your opinion too.

  1. I do not like the way it’s going. This is the generation I used to teach that is making all these rules. What have we teachers done? What have we spawned?

  2. Appalling. When will the HMRC (and most other state bodies) realise they are there to serve the citizens of this country, not to rule over them?

    Yes, they have a role to collect taxes from those who owe them. No, they should not have the right to intrude because they want it – that should be determined by a proper inquiry under the oversight of an independent party – possibly a judge or similar. (“Who will watch the watchers?” comes to mind.)

    Judge, jury and executioner indeed.

  3. There is a fairly strong march towards the State Control that characterised the 3rd Reich. Compensating for previous weakness by lashing out with invidious rules is a sign that someone, somewhere has lost control. Elsewhere there is the report that the Revenue are attacking a legal tax planning scheme, thereby triggering a demand for immediate payment of previously unpaid tax – even if it may need to be paid back later.
    There is real sense of the Rule of Law breaking down. It also suggests that those at the centre are trying to cover a growing black hole in the Treasury coffers, but want to hide the fact as the election creeps nearer.
    Perhaps Ken Durkin has a point that the newer generation no longer has a moral balance because society has been so busy changing the rules that no rules are left to be taught.

  4. Dominic Thomas 9th July 2014 at 10:06 am

    The ability of HMRC to raid accounts and make assessments of personal spending is somewhat alarming, this does raise all sorts of questions of personal privacy. However, if people are genuinely wilfully not paying owed taxes without good reason, I can understand why HMRC would act on behalf of us all to extract the money. The concern is whether HMRC is accurate in its ability to identify “wilful non-payers” as opposed to those that are merely struggling to meet a deadline. This is where great care and caution must be applied, with a clearly defined and monitored ability to appeal.

    If we applied the logic that late payment is the same as non-payment, many companies, Governments and countries would close.

  5. Clearly HMRC works on the principle WE are GUILTY until we prove our innocence. Being Self Employed I have to pay accountants HUGE sums of money to go through my bank statements – why should I then pass them onto the HMRC. Perhaps if HMRC pestered starbucks and other Tax Dodgers – who take money here and send it to Europe – to pay less tax – HMRC would be better considered. As it is HMRC are attacking the elderly the vulnerable and everyone else – the Black Shirts of HMRC – bullying people into submission.

  6. Usual mantra from this govenment (and the previous one for that matter) is that if you’ve done nothing wrong you’ve nothing to fear from this kind of intrusion.

  7. Why do they need this power, they have the power already to demand all statements.

    This just gives them like the regulator the power and the opportunity to be sheriff, judge and executioner, with no court of appeal.

    This effectively removes the court system, which cannot be right.

  8. So long as this applies only to those who are ” wilfully not paying their taxes” then I’m in favour. Much ado about nothing. I pay on time and the correct amount, I would expect others to do the same.

  9. Yes Mr Bones, but who decides the whether you are not “wilfully not paying your tax”? Ah yes, its the same organisation that assesses your taxes, and now has the ability of demanding tax because it is investigating your affairs. Being judge, jury and executioner has always been a bad precedent, and it is not made any more palatable when the relevant organisation has already been shown to be inaccurate and incapable.
    The Rule of Law requires that there be checks and balances in place before you hang somebody, not after.

  10. How do I respond to this proposal. I will certainly ensure that my political party are aware of my concerns. I have several example cases where an individual employed my HMRC has changed details on someones tax records for their own purposes or added incorrect information to the records. In each case it seems to have been out of personal spite.

    No I do not trust individuals emloyed by HMRC to do the right thing. Has anyone ever tried to complain about them and had any response, let alone a satisfactory one. It always feels as if its a war zone.

  11. A hammer to crush a nut.
    Risk throwing out all legal checks and balances to get at 1700 individuals instead of pursuing the 1700 directly. Lazy law making. There will be tears.

  12. Giving the state all that power is an affront to freedom of the individual.

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