MPs attack plans to let tax man into your bank account
The Government have hit on this idea and it is proving to be controversial. Basically, it would allow HM Revenue & Customs to go straight into your bank account and take what they want. No, we're not talking about tax. We're talking about money on top of taxes.
Gideon Osborne has come up with this plan and fellow MPs aren't impressed, with the cross-party Treasury Committee showing "considerable concern" and want more scrutiny over his proposals.
In their evaluation of the Budget, the MPs point out that these new powers could mean a sly reintroduction of the discredited Crown Preference rule, which gave the HMRC priority access to assets when firms went under.
"The proposal to grant HMRC the power to recover money directly from taxpayers' bank accounts is of considerable concern to the committee," the report said. "The committee considers a lengthy and full consultation to be essential."
"Giving HMRC this power without some form of prior independent oversight -for example by a new ombudsman or tribunal, or through the courts - would be wholly unacceptable."
They went on to dismiss the Chancellor's idea that, which is based on the way the Department for Work and Pensions (DWP) currently has similar authority to collect child maintenance, because the “parallel is not exact”.
"In those cases, DWP is acting as an intermediary between two individuals," the MPs said. "HMRC would be acting not as an intermediary between two individuals but rather in pursuit of its own objective of bringing in revenue for the Exchequer."
Not to mention the opportunity for fraud and cock-ups. "This policy is highly dependent on HMRC's ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers."
"The Government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity. These might include the award of damages in addition to compensation, and disciplinary action in cases of abuse of the power."