New HMRC powers promote offshore banking?

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HMRC is pressing to the max in the latest part of its consultation on Powers, Safeguards and Deterrents, Payments, repayments and debt: the developing programme of work; it is now seeking powers to seize the contents of individuals bank accounts and other assets without the safeguard of court approval. This comes hot on the heels of the previous consultation which is aiming for powers to search premises (including homes) without a warrant.

Keeping to a policy which apparently means that all of its powers and compliance needs are focused on combating the actions of a tiny minority of taxpayers, HMRC says that its new approach will be fair and proportional. The vast majority of taxpayers and their agents may be forgiven for finding this approach extraordinary however, and the minority...

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06th Jul 2007 09:36

Order of creditors
Am I right in thinking that the power to take money direct from bank accounts would permit HMRC to leapfrog the order of creditors. My understanding is they are no longer preferential creditors for the maintsream taxes. A business close to insolvency could have to cease trading if any creditor was arbitrarily able to remove money from its accounts. HMRC might come away paid fully or in part prejudicing or eliminating the entitlements of other creditors. Perhaps also leaving totally innocent customers who have paid for goods with orders that are not fulfilled, a threat to every citizen of the country. If so it is in everyone's interests that this proposal is implacably opposed by everyone who values the human rights of the citizen against the oppression of the state.

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By Crassus
10th Jul 2007 18:55

In the unlikely event . . .
What bothers me is that, of course in very rare instances, HMRC have been known to make mistakes. For example, the old HMCE once attempted to distrain my household effects, for VAT that was not due for a further three weeks (I had made the mistake of filing my VAT Return early). And I am still waiting for an apology twelve years later.

What happens if HMRC erroneously freezes a trader's account for a tax debt that is not in fact due? If other payments then failed, the trader's credit rating could be destroyed overnight.

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By Anonymous
06th Jul 2007 12:34

Revenue Powers
I absolutely agree with the last two contributors but don't believe that cash offshore is safe from the Revenue. We have a client who has allegedly had £13,000 seized from a bank account in Portugal by the Portuguese Revenue on behalf of HMRC in respect of tax allegedly owed in the UK!

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06th Jul 2007 15:13

Level Playing Field
Presumably HMRC will not object if equivalent powers are given to taxpayers to facillitate refunds due to them and witheld for no reason !

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