SMEs concerned by HMRC’s new US-style debt recovery powers » SMEInsider

SMEs concerned by HMRC’s new US-style debt recovery powers

A document that was set out alongside this week’s Budget announcement revealed new HMRC powers that would allow its inspectors who are chasing unpaid tax bills to take the amounts owed directly out of people’s bank accounts.

These new powers particularly sparked the ire of small businesses, which questioned them and said they weren’t accompanied by enough oversight.

“The proposed new powers permit HMRC to take the money on its own say-so. Essentially it allows HMRC to play both judge and jury with little or no external oversight,” said John Allan, national chairman at the Federation of Small Businesses.

According to the HMRC 17,000 “non-compliant individuals and businesses are likely to be affected by this measure each year”.

It should be noted that HMRC said the powers only applied to debtors who owed over £1,000.

But small businesses are concerned by these new proposals:

“We’re sceptical the tax risk and number of cases warrant giving HMRC such far reaching and comprehensive powers. We need an open debate about whether citizens are comfortable with such powers being in the hands of the UK tax authorities. In our view this undermines due process without independent, judicial oversight and is a step too far,” continued John Allan.