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HMRC plan to raid personal bank accounts
BrokenArrow
Posts: 21,665 Forum Member
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HMRC want powers to raid peoples bank accounts directly without any prior permission.
and no, this isn't a plan to catch super rich tax avoiders, this is for people who owe £1000.
But apparently, we don't need to worry because they will leave us enough to live on.
http://www.telegraph.co.uk/finance/personalfinance/tax/10954702/HMRC-raid-on-bank-accounts-goes-against-Magna-Carta-say-MPs.html
I think this is disgusting and another reason to be wary of relying too much on banks to protect your money.
Keep it under the mattress appears to be the best policy.
and no, this isn't a plan to catch super rich tax avoiders, this is for people who owe £1000.
But apparently, we don't need to worry because they will leave us enough to live on.
http://www.telegraph.co.uk/finance/personalfinance/tax/10954702/HMRC-raid-on-bank-accounts-goes-against-Magna-Carta-say-MPs.html
I think this is disgusting and another reason to be wary of relying too much on banks to protect your money.
Keep it under the mattress appears to be the best policy.
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There is simply no case for a government bypassing the legal system. If they think people owe them money then go through the court system. The person can then make their case and justice is done.
Shocking direction the country is heading in. Began by Labour, continued by the Conservatives.
I never really liked this proposal as HMRC have a very poor record when it comes to getting tax right - and when you consider that no less than the SFO could not get it's VAT right, how are meer mortals supposed to.
That said they will not be able to suddenly decide to raid your bank account - it is only when a person keeps ignoring reminders of tax owed and they have to leave enough in the account as well - so nobody will be left pennyless.
Given the way hmrc operate it's still open to enormous foul up. If they decide person X should have their account rightfully raided as X has been fiddling the books. But raid person Y's account by mistake. Would hmrc ever admit they got it wrong and compensate Y? Trying to get anything out of hmrc is like getting blood from a stone at the best of times. If they were infallible it would be another matter but hmrc don't have the best reputation when it comes to competence.
The attitude of some towards taxation is akin to the attitude of some towards illegal parking/exceeding the speed limit - they think they are somehow the victims of the "state" when fined and that they have a God-given right to do these things.
It is quite simple - if you paid what tax you owe this wouldn't arise, if not tough - but I take the point that this must include the big companies too.
And if you're worried about HMRC's effectiveness, lobby your MP to get the government to give them more staff.
This is an extremely bad idea in principle. They make far too many errors. If anyone has been in the position of trying to get money back off HMRC, they'll know what I mean. What's wrong with going through the courts? Helping themselves is a dangerous precedence IMHO.
Agreed. One of the biggest problems with this is the reversal of the age old principle of innocent until proven guilty. Basically you will have to prove that you do not owe the money. With some 'investigations' taking years this could be an issue.
Covering up the failures of HMRC by giving them more power is not the answer - maybe reducing the 16,000 pages that make up the UK tax code would make the job easier.
I don't like the proposal, did not when Labour suggested it, did not when it emerged earlier and still don 't.
No it isn't. HMRC still owes me money and persistently refuses to pay it. Having exhausted what they laughably call their 'appeals process', my only remaining option would be taking them to court. But HMRC says this is inconvenient-
But Ms Homer argued that this would “diminish the effect” of the powers. “It would put us back into the situation where the recalcitrant debtors know we can’t progress without a court order.”
Quite. But then courts are where HMRC's decisions can and should be independently challenged.
It's also the cost of challenging any HMRC decision. The article also mentions how HMRC would only steal money after having analysed a year or that person's spending habits. Then graciously leave them with £5,000 which wouldn't buy much time from a decent tax lawyer.
HRMC have screwed up our tax on more than one occasion - No way would I trust them with access to my account.
Tax investigation insurance. In the early days of the campaign against IR35 there was a discussion of what services freelancers or contractors wanted. What came out of it was Tax investigation insurance (later Professional Expertise Insurance). Since then more and more people have offered it. Basically you insure against any investigation and it pays out for a professional advisor once an investigation starts. Different versions pay out at different times - you can even have it pay out when ever you need advice.
I can see that becoming even more popular if this proposal goes anywhere becoming law.
You can also blame tax evaders and piss-taking avoiders for keeping your tax bills artifically high as well.
Are not doing anything illegal and HMRC under it's Royal Charter can only collect money that is owed legally.
You could also blame the size of our tax code which is one of the largest in the developed world. This has opened up numerous ways tax can be avoided.
Isn't most of it trying to close loopholes?
if that was the case you would reduce the rules not increase them. Just take as an example the Film Finance tax breaks - now that has a benefit, just look at the productions that have been made in the UK recently with the Tom Cruise film Edge of Tomorrow being just one recent example. Now some schemes were created and had absolutely no intention of investing a single penny in any film production. You could just abolish the tax break in which case nobody could invest - but then you also lose the jobs that are created.
Huh?
Surely evaders reduce the tax bill !
That patio would cost 20% more otherwise.
Yes, if only there was a way to recover the money that respected the individual!
Let's call it "the justice system" and the place where people go for such a thing as "the courts"...
You can see why government get away with ignoring basic principles of justice, there's no shortage of people who just don't understand.
What is that old expression - possession is nine-tenths of the law - that is what they are doing. Grabbing the money and hoping it costs too much for people to argue the toss. When you have seen people get demands twice the average wage and end up owing precisely nothing legally - giving HMRC this kind of power is like letting a child free in a candy store. (Then trying to take the child's pocket money away to pay for all the candy)
Not wishing to justify the proposal but this was suggested under New Labour first.
Because they can. Take something simple, like VAT. Ok, it's not that simple, but the basic concept is. Company buys in <stuff>, does something to it to increase the 'value' and the government takes 20% of the value added. If no value is added, or there are no transactions, VAT is not due or applicable.
So imagine my suprise when HMRC sends a VAT assessment to a dormant company. It just presents a number, tells me it needs to be paid NOW and first-borns will be confiscated if the cash isn't presented forthwith.
(ok, the first-born bit may be a slight exageration)
So if you wrote to HMRC asking for a detailed calculation showing how they arrived at that amount (ie some evidence of VAT-applicable activity having occurred), what do you think the answer would be?
Currently it's kind of blah blah you need to pay the money NOW while we think about it to avoid incurring interest, fines, first-born confiscation etc etc but essentially without evidence of VAT being due, HMRC are effectively committing VAT fraud.
In their brave new world, they want to just be able to take whatever money they think you owe them.
Very expensive. Which the taxpayer funds.
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