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HMRC with the upper hand


24 April 2019: HMRC is claiming the direct recovery of debt powers (granted in March 2016) to recover money owed directly from individuals’ bank and building society accounts have raised £178m of tax revenue between April 2016 and December 2018.

It is reported that HMRC only took action by removing money directly from a bank account 19 times, collecting £361,678 in total. However, they believe that over 1,500 notices issued which indicated funds would be taken from individual accounts contributed to the recovery of £178m and direct intervention was not needed.

HMRC has sharpened up its analytical efforts, identifying patterns of behavior and potential taxpayer infringement of the tax rules. HMRC is much better equipped to challenge taxpayers than it has ever and has led to an increase in disputes between HMRC and taxpayers and is all due to the fact that HMRC have greater access to bank information and information they can collect from foreign tax authorities.

From April 2020 reform has been proposed which will again give HMRC preferential status in insolvency distributions. The reform will only apply to taxes collected and held by businesses on behalf of other taxpayers, such as VAT, PAYE income tax and employee NICs.

If you or your clients have outstanding tax issues and need to consider how to deal with the liabilities, please speak to one of our management team. BRI’s professional advisers look at finding options that are commercially viable and provide the best outcome for all parties concerned.