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MPs 'alarmed' at plan to let tax man raid personal bank accounts

MPs and economic commentators voiced alarm yesterday over legislation that would let tax officers seize cash directly from people’s bank accounts.

The cross-party Treasury committee said it had “considerable concern” over Tory chancellor George Osborne’s plans to give HM Revenue and Customs (HMRC) debt collection officers direct access to personal banking accounts.

“Giving HMRC this power without some form of prior independent oversight — for example by a new ombudsman or tribunal, or through the courts — would be wholly unacceptable,” the committee said in a statement.

Mr Osborne has defended his policy by comparing it to the Department for Work and Pensions’ (DWP) powers to collect child maintenance.

But MPs rebuffed the chancellor’s claims, pointing out that the DWP gained no direct benefit from the cash it seized, but HMRC could potentially act “in pursuit of its own objective of bringing in revenue for the Exchequer.”

“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,” they added.

The report went on to urge safeguards including the award of damages along with compensation, and disciplinary action for misuse.

Labour Economic Advisory Panel spokesman Andrew Fisher said he was not opposed “in principle” to wielding such powers against serial tax evaders.

But he argued it was a mark of the Con-Dems’ priorities that they had not proposed to seize major corporations’ withheld tax in the same way.

An HMRC spokesman said the policy would “only affect a tiny number of debtors” and that to seize the cash HMRC officers would have to have contacted them at least four times seeking payment. Officers were also limited to the seizure of debts above £1,000 when there was at least £5,000 remaining in the target’s accounts.

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