Under powers introduced last year, HMRC can levy a charge of 7.5% on outstanding tax debts above £1,500, and can also act to recover those debts by seizing taxpayers’ belongings and selling them at auction.
As if this was not bad enough, the FT reports that HMRC are now also charging for home visits made by Debt Management Field Force staff.
One taxpayer who fell behind on repaying tax debts of roughly £1.5m, received a six-figure bill last week from an HMRC officer who visited his home while he was away in August, although no assets were taken.
In the letter from the Debt Management Field Force, HMRC wrote that the visit had incurred a fee of £235 and that another charge of 7.5 per cent of the outstanding tax had been added to his debts.
If the combined debt was not settled, the letter made clear that goods would be seized and sold at auction — incurring another fee of £110 — and another 7.5 per cent fee would be levied on the amount owed over £1,500, in line with rules set out by the Ministry of Justice.
Ker Farking Ching!
“Pay late and you will pay more”
Michael Avient, personal tax partner at UHY Hacker Young, said that despite handling many cases involving “distraint”, this was the first instance he had seen where a fee had effectively been applied for a debtor visit.
“This is something that has gone under the wire,”A spokesperson for HMRC said it preferred taxpayers to talk to the authority rather than incur additional fees such as these, and that debtors received multiple calls and letters asking for payment before these powers could be used.
“We support customers with genuine short-term difficulties through allowing time to pay whilst taking firm but proportionate action against those who do not engage with us.”Nonetheless, it's a nice little earner for HMRC!
Tax does have to be taxing.
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