HMRC to be Given Powers to Enforce Payment

Under proposals outlined in the recent Budget, from 2015 HM Revenue and Customs (HMRC) are to be given new powers to access the bank accounts of ‘tax debtors’ in order to remove sums needed to satisfy tax debts due.



The right will only be exercised when the tax due exceeds £1,000. The issue of a demand by HMRC to an individual’s bank to make the necessary payment could cause significant problems for the taxpayer as it could lead to a number of negative consequences, such as triggering the reduction of an overdraft limit. The right also, in effect, improves HMRC’s position relative to other creditors.



HMRC are also being given the right, where there is an open tax appeal or enquiry into a taxpayer’s affairs, to require payment of the ‘tax in dispute’ on the issue of a ‘Notice to Pay’. The practical effect of the rule will be to prevent the postponement of disputed tax. Penalties will apply for late payment.



There is likely to be considerable debate over these proposals, as the impact on taxpayers and, in some cases, the creditors of taxpayers could be considerable.