You are here

Law Society labels HMRC’s debt recovery plans ‘regressive and draconian’

Mistakes will 'inevitably' occur in a system where the state has a 'preferential position' and no judicial supervision

18 August 2014

Add comment

Mistakes will 'inevitably' occur in a system where the state has a 'preferential position' and no judicial supervision

Proposals from HMRC to take money direct from taxpayers' bank accounts - without going through the courts - have been branded 'regressive and draconian' by the Law Society.

The Law Society objects to HMRC officers 'effectively acting as claimant and judge at the same time'. The proposed measures would place the state in a 'preferential position' to other creditors who would have to pursue their cases through the courts.

Furthermore, the Law Society argues that the use of power without judicial supervision will lead to hardship where HMRC make mistakes, which the society describes as 'inevitable'.

HMRC is also proposing that a taxpayer is given only 14 days to respond after the monies in their bank accounts are frozen, before the monies are then taken. The Society suggests that this short deadline might easily be missed by a taxpayer. Thirty days would be 'fairer' according to the consultation response; the same period in which HMRC are supposed to respond to enquiries.

The chair of the Law Society's tax law committee, Gary Richards, said: "We agree that tax that is due must be paid, but HMRC's existing powers - if properly used - are sufficient.

"There are already streamlined procedures for recovery of tax due in UK courts. We are concerned that the direct recovery of debt from bank accounts without judicial supervision may not comply with data protection or human rights legislation. It would effectively reintroduce Crown preference - a measure swept away with good reason in 2002."

A full copy of the Law Society's consultation response is available here.

Categorised in:

Tax & Wealth structuring