"Taxman to raid joint accounts"

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The taxman is demanding powers to seize money from couples’ joint bank accounts – even if one partner owes nothing.



HM Revenue and Customs wants to be able to take money from any account – including Isas and joint accounts – if it believes someone owes taxes.

MPs will today launch a withering attack on the controversial proposal, which they say could cause ‘serious detriment’ to ordinary taxpayers.

The Treasury select committee warns: ‘This policy is highly dependent on HMRC’s ability to accurately determine which taxpayers owe money and what amounts they owe – an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers.’

Under the proposal, HMRC will be able to take all the money a person owes out of their bank account, building society account or Isa ‘without the need to apply to a court’.

HMRC insists it will not take the money unless the person has at least £5,000 left across all their bank accounts, including Isas, after the debt has been paid. It will not ‘create or increase overdrafts’.

Anybody who owes more than £1,000 could be affected and HMRC expects to seize £375 million over the next four years.

But experts warn that many couples are secretive about their finances, do not know what each other earns, and never discuss their finances or whether or not they have paid their tax bills.

Robin Williamson, of the Chartered Institute of Taxation, said: ‘The problem is HMRC’s “shoot first, ask questions later” approach.’

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, added: ‘Clearly, it needs a safeguard because otherwise it will hit people who have no idea that their husband or wife is a complete rogue.’

Innocent victims of the policy could include pensioners who put money into a joint account, managed by younger relatives. If their younger relative owes taxes, the money could be seized, even though it belongs to the elderly person.

When the plans to raid accounts were published in the Budget, there was no mention of joint accounts. The proposal was first mooted in an HMRC consultation document released this week.

Anthony Thomas, of the Low Incomes Tax Reform Group, said the proposals – subject to a consultation which ends on July 29 – posed ‘far too great a risk’ to ordinary Britons.

He said: ‘If strictly observed, the safeguards and conditions as set out should be broadly effective but if they are disregarded, vulnerable taxpayers will suffer – and that is far too great a risk.’

The consultation document said HMRC expects 17,000 people a year will be hit by the new rules, known as the ‘direct recovery of debts’.

Typically, they will owe an average of £5,800 in tax. The document acknowledges the importance of ‘striking a balance between recovering money from debtors while protecting the rights of other account holders’.

But it said its new powers must include joint accounts, or it would ‘provide an obvious opportunity for debtors to circumvent paying what they owe’.

It suggests a ‘pro-rata’ system, whereby HMRC could deduct 50 per cent of the credit balance of a joint account to pay a tax debt.

But Mr Williamson said it was wrong to withdraw 50 per cent of the money from a joint account because many couples did not contribute money to a joint account on an equal basis.

He added: ‘For example, a woman might be putting in all the money while her husband is pursuing an unsuccessful business venture and has run up a tax debt.’

David Gauke, exchequer secretary to the Treasury, said: ‘It will help to level the playing field between those who pay what they owe when they owe it, and those who do not.’

Britain is being robbed of £35 billion a year by cheats who don’t pay their taxes and others who find ways of avoiding paying them, according to HMRC.

A spokesman said: ‘We will be including joint accounts. If we didn’t, there would be an opportunity for debtors to get out of paying what they owe.’

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But Mr Williamson said it was wrong to withdraw 50 per cent of the money from a joint account because many couples did not contribute money to a joint account on an equal basis.

Joint accounts have always assumed to be 50% owned equally by each partner regardless of who contributed.

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I'd never hold a joint account! - Made that mistake once... Only once!

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David Cameron: Taxes will rise unless we can raid bank accounts



Taxes will have to rise unless officials are given new powers to raid people's bank accounts, David Cameron has said.

The Treasury select committee warned that allowing HM Revenue and Customs to remove cash from bank accounts without court orders is "very concerning" because of its history of mistakes.

The committee said that taxpayers could suffer “serious detriment” if officials are able, either by mistake or through an “abuse” of power, to take money from people who have done no wrong.

Mr Cameron yesterday claimed that the alternative was to "put up taxes". He told Sky News: "We have a choice here. If we don't collect taxes properly and make sure people pay their taxes properly we look at the problems of having to raise tax rates. I don't want to do that, so I support the changes the Chancellor set out in the Budget which is to really say that not paying your taxes is not acceptable.

"It is very clear that they can only do this if there is a debt of over £1,000, they can only do it if there's £5,000 or more in the account after this has been completed. The general principle – do we want to pursue every avenue of making people pay their taxes they are meant to pay before we put up taxes, because that's the alternative – absolutely, yes we do."

The policy yesterday faced further criticism from chartered accountants, who said that money should only be taken from people's accounts with their agreement or a court order.

ICAEW, the body representing accountants, said that there is "considerable concern" among its members about the measures, which could be open to "mistakes and misuse".

Under the planned new measures, tax officials will have an automatic power to take money from a bank account when the holder has failed to act on four formal warnings requiring payment.

Currently officials can only remove money in this way with the permission of a magistrate or judge.

The Treasury insists that safeguards will ensure that the new power is only used against those who have repeatedly refused to pay their taxes.

But the MPs say in their report: “The ability directly to have access to millions of taxpayers’ bank accounts raises concerns about the risk of fraud and error.

“This policy is highly dependent on HMRC’s ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers.” The Revenue has faced repeated criticism over the accuracy of its tax records and its handling of sensitive personal data.

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I swear that Camoron is the lowest form of life on this planet! The man is nothing short of an oxygen thief. If the imbecile had gunpowder for brains, he wouldn't be able to blow the wax out of his ears.

The sooner the moron leaves No.10 the better!