HMRC warns tax-payers it could use 'recovery powers' to directly raid bank accounts over unpaid bills
His Majesty's Revenue & Customs (HMRC) has the ability to slide right into your personal bank account, didn't you know?
That's only if you owe the tax authority more than £1,000, mind, so don't be losing your mind over the news if you're a reliable taxpayer.
Known as 'direct recovery powers', Chancellor Rachel Reeves reinstated them last year after they were put on hold throughout Covid-19's economical fallout.
Since then, HMRC has seized at least £13 million from those in debt, per The Telegraph.
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Everyone else, meanwhile, has either settled their shortcomings or entered regimented payment plans after an accessibility warning from HMRC.
Back when the 'recovery powers' were first introduced a decade ago, some finance experts seemed disturbed by the notion.
The aforementioned publication's Mike Warburton was one of them.
"This is a blunt sword," he said at the time.
"I am very concerned that they may be using this in circumstances where the tax may not be due and they are effectively bullying people into paying."
Chief executive of accountancy firm Blick Rothenberg, Nimesh Shah, was equally as critical.
"I remain unconvinced that this is a sensible tool for HMRC to use, especially at a time when businesses and individuals are struggling with an increased tax burden as a direct result of Government tax changes, so it seems a double blow."
Fortunately, the mechanics of HMRC's system are not overwhelmingly advantageous to its creators.
HMRC has to inform individuals before any money is directly removed from a bank account or cash ISA, while providing a 30-day notice period.
It is said that HMRC must also leave a minimum balance of £5,000 within the account and can only proceed with action once the appeals process has drawn to a close.
A spokesperson for HMRC defended the 'recovery powers' and suggested it was aimed at those refusing to pay despite being financially well-off to do so.
"Most people pay tax on time and in full but it's right that we seek to recover tax from the tiny minority who can afford to pay but refuse to," they commented.
"More than £13million of tax has already been paid or brought into payment plans for public services due to the deterrent effect of this measure."
On the flipside of this anxiety-inducing topic, it's believed that 750,000 British citizens are owed an average of £2,200 by the tax body.
To find out why, follow this link.
Topics: Money
Dan Seddon