HMRC seeks powers to recover tax debts from ISAs
HM Revenue & Customs (HMRC) is looking to increase its powers to allow it to take tax debts directly from individuals’ ISAs.
In this year’s Budget, the government gave HMRC the power to recover tax debts of over £1,000 directly from individuals’ bank accounts if they had ‘sufficient funds’ leftover.
In a consultation paper entitled ‘Direct Recovery of Debts’, HMRC proposed to extend these powers to take tax from ISAs in a ‘lower cost and less invasive’ way.
‘It is an administrative measure which will allow HMRC to recover tax and tax credit debts directly from debtors’ bank and building society accounts, including ISAs, without the need to apply to a court,’ it said.
HMRC proposed to leave a minimum of £5,000 after the debt has been recovered so it would not cause ‘unnecessary financial trouble’ for those individuals.
The types of debt that will be covered by HMRC’s new powers including unpaid tax including corporation tax and Pay As You Earn tax.
It added that debtors will be contacted several times and have many opportunities to pay before getting to the stage where HMRC will directly cover the debt.
It said it would only use these powers in cases where debtors have refused to co-operate or failed to answer letters, telephone calls or other communications.
(By Jun Merrett)
Source: citywire
