90% of tax experts reject HMRC direct debt recovery plan

The majority of tax professionals and accountants reject HMRC's plans to take funds directly from taxpayers' bank accounts to recover outstanding tax debts.

ICAEW’s Wyman Debate, which addressed the question, Direct recovery of debts – a power too far?, reinforced the general opposition to the government’s proposals to take funds directly from taxpayers’bank accounts.

The direct recovery of debt (DRD) powers announced at Budget 2014 mean that HMRC could collect tax and tax credit debts directly from bank accounts, without the need for a court order, where they believe there are outstanding tax debts.

Speaking in favour of the proposals, Stephen Herring, head of taxation at the Institute of Directors, and Jolyon Maugham, barrister at Devereux Chambers, saw the merits of DRD, but both speakers stressed that  adequate safeguards needed to be in place before the measures were introduced.

While accepting the problems HMRC face with debt collection, Rebecca Benneyworth, ICAEW tax faculty chairman, could not support the powers as proposed because based on her practical experience, small businesses that cannot cope with the tax system would be vulnerable.

Jonathan Schwarz, barrister at Temple Tax Chambers, opposed the plan, saying that the proposals circumvent the courts, which is contrary to the principles of constitutional democracy, ie, separation of powers.

In a poll taken at the debate, only one in ten tax professionals and accountants fully agreed with the proposals to introduce DRD.

HMRC’s DRD consultation closes on 29 July 2014. To read more about the proposals and the associated risks, read our exclusive report by tax specialist Meg Wilson - Direct debt recovery: why the proposals are risky for taxpayers 

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Diane Tan |Content manager - current awareness, CCH

Diane Tan is content manager, current awareness at CCH, Wolters Kluwer UK www.cch.co.uk...

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