A report finding 90% of complaints against the taxman to be just has been seized upon as evidence that he should not be given access to people’s bank accounts to recover sums he says are owed.
The British Bankers Association reportedly made the connection between the high success rate for complainers against HM Revenue & Customs and its incoming power to raid accounts last week.
In a letter to George Osborne, the chancellor, the BBA points to the 2014 findings of the Adjudicator’s Office, to support its argument that HMRC is not “sufficiently competent” to be granted such a “strong” power.
Vulnerable taxpayers and those who unintentionally accrue tax debts will be hit -- as will HMRC, with reputational damage and “potential litigation,” wrote BBA’s chief executive Anthony Browne.
His letter, seen by the Financial Times, calls for greater independent oversight because, as proposed, HMRC will be able to dip into its customers’ bank accounts to seize unpaid tax debts of at least £1,000 without having to apply to a court.
Mr Browne’s letter is said to call on Mr Osborne to obtain legal advice on whether the envisioned debt recovery power for the Revenue contravenes the Human Rights Act, and whether it is “necessary or proportionate.”
Alongside the banks, which may be envisioning the unenviable prospect of having to explain to customers why their funds are missing, an accountancy firm is among the latest critics.
“I am deeply concerned about this sledgehammer to crack a nut; the safeguards are simply inadequate,” warns Tina Riches, national tax partner at Smith & Williamson.
“As proposed, instead of only the recalcitrant being tackled, ordinary compliant taxpayers could be affected, where HMRC’s records are incorrect – and we all know that occurs regularly.
“It flies in the face of the British legal system to give the Executive, i.e. HMRC, such strong powers without moderation by a court system. Such powers would be a further push down an extremely slippery slope.”
As to the necessity of the power, HMRC said last week that there was a “persistent few” of its customers who have the means to pay what they owe, but don’t or refuse to.
The department’s impact assessment of the power is more specific, projecting its use in 17,000 cases where HMRC’s numerous requests to pay outstanding liabilities have failed to work.
Ms Riches reflected: “HMRC indicate that in 2016/17 it would expect to raise about 0.025 of 1% of total revenue from this proposal although it could affect any compliant and vulnerable people on the wrong end of a blunder.
“Slammed in 2007, when it last reared its head in public, this obviously remained on the back burner until the gas was recently turned up, yet it remains one of HMRC’s least popular ideas in years.”