Banks warn HMRC is “too incompetent” for tax grab plan

Government plans to allow HMRC direct access to some debtors’ bank accounts have come under fire from the British Banker’s Association which has questioned the taxman’s competence. The BBA believes that HMRC has yet to prove it has the skills and judgement required to use the legislation responsibly.

In the 2014 budget, George Osborne unveiled plans that would allow HMRC to claw back taxes directly from debtor bank accounts. Anyone owing £1,000 or more could find themselves on the wrong end of this legislation.

But the BBA now warns that the change allows HMRC to become its own court, extracting money from accounts before debtors have a chance to balance their finances properly. The organization is concerned that these extractions could occur without any consideration for extenuating circumstances and without offering alternative payment plans – particularly concerning for those who are least able to pay.

Although debtors are supposed to be left with at least £5,000 in their accounts, previous problems mean that many are sceptical as to whether the new system will be as painless as claimed. The BBA also points to the fact that over 90% of complaints about HMRC referred to the financial ombudsman are fully or partially upheld.

The BBA believes that the new rules are neither necessary nor proportionate and has asked Chancellor George Osborne to confirm that the new law is not in breach of EU human rights legislation.

When asked to respond to the BBA’s concerns, HMRC said it rejected questions about its competence.