New powers to seize assets: HMRC defends its proposals
Responding to Accountingweb’s new item “New HMRC powers promote offshore banking? HMRC have come back to defend controversial new proposals which would give it the ability to seize assets from its debtors without the safeguard of approval by the courts.
It says:
“The suggested idea would only ever apply to established tax debts once all the normal avenues for appeal had been exhausted, and after repeated requests for payment had been ignored.
Continued...
The full article is available to registered AccountingWEB members only. To read the rest of this article you’ll need to login or register.
Registration is FREE and allows you to view all content, ask questions, comment and much more.
Or if you are already registered, login here
This looks like...
...an attempt to re-introduce Crown Preference by the back door but without arguments to support privileging HMRC over other creditors.
If income tax debts are privileged in this way , why not other taxes such as council tax ? And if council tax is privileged, why not other government-imposed levies such as the road fund licence and the TV licence? And, if they are privileged, why not gas, electricity and water bills?
Why should income tax debts of businesses take preference over outstanding wages and salaries? In what way could social justice be said to be advanced if collection of income tax deprives workers of what they have earned?
Suppose the unpaid income tax is last year's but the debtor has other bills outstanding from years before that. Why should the later overdue income tax take precedence over the earlier debts?
None of these questions are answered by HMRC. Indeed they are not even addressed. It is simply assumed that income tax debts must take precedence over all others. No argument about this is allowed.
The only attempt at justification is the point about fairness. But, ironically, the major impact of these proposals would be to give HMRC an unfair and unjustified advantage over all other creditors.
It's like something out of Star Trek
I need more power Scotty.
What's wrong with a court order?
If this is a step of last resort and the taxpayer is a tax-nonpayer then what on earth is wrong with seeking some sort of court order to initiate debt collection.
HMCE wish to have quite extreme powers to take money from anyone they want to with a 'Trust us' note that they will not abuse those powers.
I'm sorry but HMCEs record on tax assessments is not very good. I can quite easily see HMCE taking £40K from someone's bank acocunt just 'to get their attention' and then negotiate a settlement by deciding how much money to hand back to the taxpayer.
If tax law was unambiguous it would be less of an issue. But the recent Arctic S660a case suggests that HMCE can be highly creative in its interpretation of tax legislation even when that legislation is supposed to be clear.
If HMCE believe tax is due the onus should be on HMCE in the first instance to demonstrate their case and not on the taxpayer to prove that tax is not due.
This proposal would give HMCE the power to bankrupt anyone on a whim with maybe a reluctant apology if they are found to be in error. That is far too much power for any government department to have outside of the law.