08 May 2014
HM Revenue & Customs (HMRC) is set to recover unpaid tax and overpaid tax credits directly from the bank accounts of businesses and individuals that fail to pay, under new rules.
The Direct Recovery of Debts (DRD) initiative was outlined in the 2014 Budget and the proposals are now under consultation. If approved, DRD will allow HMRC to recover tax debts from taxpayers who owe more than £1,000.
HMRC will be able to take money from bank accounts, building society accounts and Individual Savings Accounts (ISAs).
According to HMRC, only those with long-term debts who have received at least four payment demands will be targeted.
A minimum total of £5,000 will be left across debtors’ bank accounts, including their savings accounts. The amount owed will be frozen in debtors’ accounts for a period of 14 days before being seized, to give taxpayers the opportunity to contact HMRC regarding payment of the debt.
Around 17,000 individuals are expected to be affected by the measures, which are set to take effect in 2015.
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