Inland Revenue to recover unpaid tax ‘directly from taxpayer accounts’
19th August 2014
Under new rules HMRC is set to recover unpaid tax and overpaid tax credits direct from the bank accounts of businesses and individuals. The Direct Recovery of Debts (DRD) initiative was outlined in the Chancellor's 2014 Budget. The proposals are now under consultation and if approved, DRD will allow HMRC to recover tax debts from taxpayers who owe more than £1,000.
H M Revenue & Customs will be able to take money from bank, building society accounts as well as Individual Savings Accounts (ISAs). Only those with long‑term debts who have received at least four payment demands will be targeted.
A minimum total of £5,000 will be left across debtors’ bank accounts, including their savings accounts. The amount owed will be frozen in debtors’ accounts for a period of 14 days before being seized, this will give taxpayers the opportunity to contact HMRC regarding payment of the debt.
Intially around 17,000 individuals are expected to be affected by these measures, and this is set to take effect in 2015.