Policy document proposes ‘shocking’ new powers for HMRC
In a policy document published by HM Revenue & Customs (HMRC) earlier this week, the tax authority has requested new powers to be able to access taxpayers’ bank accounts without requesting permission beforehand.
The ‘shocking’ request, which comes as part of new plans to crack down more aggressively on tax evasion, has caused a media storm, with some criticising the proposals as a “troubling” effort to invade peoples’ privacy.
Under existing laws – which date back to 1970 – HMRC is required to contact banks, lawyers, accountants and other third parties to request access to such information. From here, these institutions will notify customers of HMRC’s intent to access their bank statements and other personal information.
However, the tax authority has voiced concerns that this level of transparency and bureaucracy proves ineffective when it comes to launching investigations and that HMRC would benefit from being able to be able to draw ‘a veil of secrecy’ over such inquiries.
It says that the existing system uses up a “disproportionate amount of resources” and that the process needs to be more streamlined so that HMRC is better placed to crack down on income, Capital Gains Tax (CGT), corporation tax and VAT avoidance.
It adds that foreign Governments have repeatedly complained that the system is “onerous” when it comes to launching tax investigations into individuals with a connection to the UK.
Under the requested changes to so-called ‘information orders’, HMRC would be able to examine personal bank accounts in order to determine whether or not taxpayers are paying the correct level of tax, reports suggest.
The proposals have attracted widespread criticism.
John O’Connell, Chief Executive of the TaxPayers’ Alliance, said: “Giving the taxman powers to access taxpayers’ bank accounts without notifying them is a sinister step that would undermine fundamental freedoms.”
Meanwhile, Justin Modray, of consumer advice group Candid Money, added: “Anything that gives the taxman more power to dive into your finances is a concern. There are people who do evade tax, and the more that’s clamped down on, the better. But the fear for ordinary people is that HMRC could be poking around in your bank account and you wouldn’t know anything about it.”