Now the taxman can grab £17k straight from your salary

17 October 2014

Daily Mail - Monday Sep 29, 2014 by Louise Eccles, Business Corrspodent

By Louise Eccles - Business Correspondent

The taxman has been accused of trying to become 'all-powerful' after vastly increasing the amount that can be taken from salaries.

HM Revenue & Customs will be able to take up to £17,000 from pay packets - compared to the current limit of £3,000.

From April tax codes will be altered for those believed to have underpaid income tax, capital gains tax or National Insurance contributions.

The latest power grab follows outrage over proposals by the Treasury to raid bank accounts for unpaid taxes without gaining permission from the courts. Such measures have been called ‘draconian and regressive' by industry bodies, while others have accused HMRC of acting as 'judge, jury and executioner’.

Yesterday Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said: 'This is another creeping of HMRC's powers, which are skewed in favour of themselves and away from the taxpayers. HMRC is becoming a more confrontational and all-powerful organisation.’

HMRC, headed by Lin Homer, has had the power to seize cash wages since 1944 and the taxman insists any money taken would be spread out over 12 monthly instalments.

But accountancy firm Kingston Smith said raising the cap could be seen as 'a new high in the intrusion of the state into private affairs’.

Tax partner Tim Stovold said: 'These so far overlooked new rules are a continuation of powers being given to HMRC to collect amounts owing to them and will come as a nasty surprise to many.’

George Osborne has announced a raft of measures to reclaim tax in recent months, which will generate billions of pounds for the taxman.

The Government recently consulted on the controversial 'direct Bid: HMRC chief executive Lin Homer recovery of debts', which would enable unpaid tax to be recovered from 'A nasty surprise to many’ bank and building society accounts without going through the courts.

Officials want to be able to take funds directly from current accounts, joint accounts or ISAs. They will focus on debtors who owe at least £1,000 and who have been contacted at least four times by HMRC.

In addition, from next month, the Government's 'accelerated payment’ rules will be implemented - forcing businesses and individuals to pay disputed tax up front before their given to HMRC to collect amounts owing to them and will come as a nasty surprise to many.'

George Osborne has announced a raft of measures to reclaim tax in recent months, which will generate billions of pounds for the taxman.

The Government recently consulted on the controversial 'direct Bid: HMRC chief executive Lin Homer recovery of debts', which would enable unpaid tax to be recovered from bank and building society accounts without going through the courts. Officials want to be able to take funds directly from current accounts, joint accounts or ISAs. They will focus on debtors who owe at least £1,000 and who have been contacted at least four times by HMRC.

In addition, from next month, the Government's 'accelerated payment’ rules will be implemented - forcing businesses and individuals to pay disputed tax up front before their cases are heard in court.

The Government is consulting on whether these rules should include those thought to be using schemes to avoid inheritance tax. HMRC said the Government held a full consultation on the changes in 2013 and the higher cap would come into effect in April.

The limit would be earnings related and gradually increase from earnings related and gradually increase from £3,000, depending on salary. This will remain at £3,000 for those earning less than £30,000, but rise to £17,000 for those on more than £90,000.

An HMRC spokesman said: ‘Taxpayers welcome the o-ption to have tax debt collected by instalments. This is a long-standing feature of the payroll system and the increase in the threshold will allow more tax debts to be paid in this way.'

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