DRD Plans Watered Down - Seemingly

The Treasury's Direct Recovery of Debts (DRD) plans have, seemingly, been watered down. The plans now come with a number of safeguards; eg taxpayers will be afforded the right of appeal at court before any funds can be emptied from their bank accounts.

There will be a guaranteed face-to-face contact with an HMRC officer and the creation of a specialist unit to deal with cases involving vulnerable members of society, as well as the provision of a dedicated DRD team and helpline.

Additionally, action will only be taken against those with over £1,000 of tax or tax credits debt, a minimum of £5,000 will be left across debtors' accounts, a lien will only be placed on the funds in the affected account up to the value of the debt and the recalcitrant taxpayers will have 30 days (twice as long as originally planned) to contact HMRC and arrange repayment.

Many people are hailing this as a victory, and are expressing gratitude to the government for listening. All very well, and polite. However, I would make two observations:

1 There are perfectly adequate means, via the courts, already at the disposal of HMRC to recover tax debts. These extra powers are unnecessary.

2 The above modifications are merely "promises" made by Gauke et al. Until the proposed legislation is actually scrutinised, those offering thanks for a "listening" government may care to take their feet off the "gratitude pedal" and stop kowtowing.


Tax does have to be taxing.

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HMRC's £5.6BN Planned Smash and Grab

Despite the silky smooth assurances of Gauke and HMRC that the plans for DRD would only affect recalcitrant tax debtors, it seems that (as noted yesterday) there is more than a wee bit of mission creep built into the plans for DRD.

The Independent reports that the debt owed to government (the taxpayer), after more than a decade of overpaying tax credits, has now reached more than £5.6BN.

HMRC plans to seize money from around 3,000 people's bank accounts a year for overpaid tax credits, according to figures released by HMRC, in response to a Freedom of Information request by the campaign group False Economy.

Now loyal readers will recall that when DRD was first mooted, Lin Homer stated that the amount that HMRC would raise over four years would be in total around £375M.

Either she is lying, or the DRD scheme is but pissing in the wind against a debt of over £5.6BN.

Which is it, is Homer lying or is HMRC pissing in the wind?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

DRD Mission Creep

And so it begins!

HMRC powers to recoup unpaid #tax directly from accounts could also be used to recover money from people paid too much in tax credits.
— The Morning Account (@MorningAccount) September 1, 2014

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Too Incompetent To Be Trusted

In a letter to the Chancellor, the British Bankers' Association (BBA) state that HMRC is too incompetent to be trusted with powers to raid people's bank accounts.

An extract of the letter from Anthony Browne (CEO of BBA) is reproduced in the Telegraph:

“It is clear that HMRC’s performance cannot yet be considered as sufficiently competent to wield an unchecked power this strong, at least not without significant reputational damage and potential litigation.

HMRC would effectively be a judge in its own cause.”

It is a rare occasion indeed when I agree with the BBA. However, in this particular case I am in full agreement with them.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

DRD Epetition

My thanks to Mike Truman (Editor of Taxation) for alerting us to a petition against the proposals to allow HMRC to take money from recalcitrant debtors' bank accounts (aka “Direct Recovery of Debt” - DRD).:

"Your readers may be interested to know that Taxation has launched an epetition to get these proposals pulled from the Finance Bill 2015 and have a proper consultation about the problem of deliberate non-payers. 

It's at http://epetitions.direct.gov.uk/petitions/68384 and has picked up well over 600 signatures in just a few days.

Mike Truman
Editor, Taxation magazine"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

DRD Unconstitutional

Unsurprisingly many people are still vexed (to put it mildly) about the proposals to allow HMRC to take money from recalcitrant debtors' bank accounts (aka “Direct Recovery of Debt” - DRD).

The simple fact of the matter is that no one trusts HMRC not to screw this up, nor not to be tempted to abuse these powers.

Latest in the long line of organisations to criticise this proposal is the ICAEW Tax Faculty, which stated that the safeguards are far from adequate and that HMRC “should go back a step and consult properly


”.

Powers such as these require independent judicial oversight, the ICAEW are quoted in economia:

“this contravenes the constitutional principle of separation of powers”. 

ICAEW believes tax recovery powers must be “fair, proportionate and accompanied by robust safeguards”.

Given HMRC's preponderance to make errors, and to target those who are the easiest to target, it is hardly surprising that no one trusts them with these powers.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"