HMRC’s revision to its controversial proposals represent a major victory for AAT’s lobbying team.
The Taxman has this morning diluted its proposals to seize cash from individuals’ bank accounts – following intense lobbying from AAT.
The overhaul led AAT bosses to withdraw their opposition to Direct Recovery of Debt (DRD) and move to support the scheme.
New measures announced today
But, following pressure from AAT and partners across the accountancy sector, HMRC this morning agreed to measures to mitigate the negative impact of DRD.
Under the revised package, an HMRC Field Force officer will visit alleged debtors in person to assess their level of vulnerability, secure payment upfront or arrange a time when debt can be settled.
Speaking exclusively to AAT Comment’s sister title Accounting Technician magazine ahead of the DRD relaunch, HMRC director general of personal tax Ruth Owen said that the Taxman has listened to the sector.
“We absolutely recognise the risks and the worries and that’s why I think we ought to come out and have another conversation about how those safeguards will apply in all the situations you describe because [accidental debtors and vulnerable groups] are not the people we want to target… We really are after serial avoiders… And I think [we will show] that we have listened to some of the worries.”
Brian Palmer FMAAT, AAT tax policy adviser, who spearheaded AAT’s campaign against DRD, praised the Taxman. “AAT felt that for certain debtors deemed vulnerable, extra support was the key to helping them to pay off their debts,” he added.
Adam Harper, Director of Professional Development, welcomed the HMRC rethink.“Most people, who pay their taxes in full and on time, rightly feel it is unfair that anyone is able to evade paying their dues, so we wholeheartedly support any attempt to ensure that a noncompliant minority meet their obligations,” he said. “Our concerns centred on a number of issues that we felt, as proposed, could make diligent enforcement of this legislation difficult. HMRC’s decision to listen to AAT’s concerns gives us the confidence that HMRC will have created a more robust and thorough policy that will tackle those who willfully evade paying what they owe – while balancing the rights of HMRC with the rights of the taxpayer.”
The key DRD revisions
1. Judicial protection: New legislation to give taxpayers three opportunities to dispute HMRC claims – a first-tier tribunal; an objection to HMRC once funds have been seized; and appealing to the County Court if HMRC declines to uphold the objection
2. Increased time: A doubling of the window to object to HMRC before funds are seized – from 14 days to 30 days
3. Less intrusion: HMRC has abandoned plans to insist on 12 months of account history, in a bid to reduce concerns over invasion of privacy
4. Fairer failures: The Taxman has pledged to remove measures that would have seen it become the top priority creditor when firms become insolvent
5. Home visit: An HMRC Field Force officer to meet alleged debtors in person prior to check vulnerability and arrange a time to make the pay
6. More help: HMRC will create a specialist unit and DRD team and launch a DRD helpline.Vulnerable debtors – such as those who become DRD targets because of circumstances beyond their control – may have opportunities to be removed from the DRD target list and instead be referred to HMRC’s support team, who will discuss ways of their paying their taxes
7. Open dealing: A regular report to be published showing number of appeals and the proportion of them that were upheld
8. Decision watchdogs: Commissioners to oversee DRD decision-making
9. Partnership working: HMRC to liaise with voluntary groups and offer details on where those affected by DRD proceedings can find independent support
Check out our full exclusive interview with Ruth Owen in the upcoming January/February issue of Accounting Technician magazine.
Ben Walker is the former editor of Accounting Technician.