In HMRC

More experts have joined the growing chorus of alarm over proposals to permit HMRC to retrieve outstanding tax directly from the bank accounts of small businesses.

On Wednesday, the Federation of Private Businesses (FPB) called for the new powers to be scrapped as they would unfairly target small firms; now, the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) have added their voices to rising tide of professional concern over the new proposal.

Both organisations endorse the government’s motive for increasing tax compliance but each considers the new plan to have insufficient inbuilt safeguards. CIOT and ATT believe that before anyone, including government departments, can remove money directly from a business’s or citizen’s bank account, some form of judicial oversight should be required.

Anne Fairpo, CIOT’s president, said that enabling HMRC to bypass the courts entirely and take money from bank accounts was “disproportionate”. Tax tribunals, she said, should give an “express form” of judicial oversight if the county court system cannot be improved upon. She added: “Additionally, to safeguard vulnerable debtors, the government should only pursue debts through the direct recovery of debt route for sums far greater that the currently proposed minimum sum of £1,000.”

Ms Fairpo’s views were supported by ATT president Natalie Miller, who believes the proposals have the potential to impact compliant taxpayers who, for reasons such as moving home or sickness, have either not received or have been unable to respond to HMRC correspondence.

With the UK’s tax regime tightening inexorably, independent professionals wishing to pursue contracting careers might be well advised to do so through tax-compliant Umbrella Companies.

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