The Commons Treasury Committee has warned that innocent people face having money taken straight from their bank accounts without a court order under new powers that may be given to HM Revenue & Customs (HMRC).
The Committee, led by Conservative MP Andrew Tyrie, called the current proposals “very concerning” because people will be at risk of having money wrongly taken out by the taxman.
According to the department, there could be as many as 17,000 people a year affected by the new tax collection powers, which are expected to raise around £100m annually. Currently, such debt can only be removed from individuals’ accounts with the permission of a magistrate or judge.
The Treasury is adamant that there are sufficient safeguards to stop errors occurring, as the taxman will only be able to take the money after debtors have ignored four requests for payment and if the tax due is more than £1,000. In addition, HMRC would have to leave £5,000 in the account after they had taken what is owed.
However, the Committee pointed to the department’s somewhat chequered record of errors in the past, with the Revenue admitting that more than five million people still have the wrong tax code, and said that the new policy would be highly dependent on HMRC’s ability to determine accurately which taxpayers owe money and how much they owe.
The Committee added that incorrectly collecting money would result in serious detriment to taxpayers, so the Government must consider extra safeguards to ensure that HMRC cannot act “erroneously with impunity”.
The report concluded by saying that such exceptional powers as this require prior independent oversight, so the Government must demonstrate that it has dealt with the Committee’s concerns before proceeding.