H.M.Revenue and Customs will soon be able to take up to £17,000 directly out of the pay packets of British workers who have underpaid tax – an increase of more than £14,000 on the current limit.
From April tax codes will be altered for those believed to have underpaid income tax, capital gains tax or National Insurance contributions that will mean that HMRC will be able to take ever larger amounts from each pay cheque.
HMRC has had the power to seize amounts from people’s wages since 1944 and insists any money taken, will be spread over 12 monthly instalments to make it easier for the individual.
Under the new changes, the limit would be earnings-related and gradually increase from £3,000, depending on salary. This will remain at £3,000 annually for those earning less than £30,000, but rise to £17,000 for those on more than £90,000.
This is the latest in a variety of new tax grabbing powers given to the department, which have been labelled ‘draconian and regressive’ by tax experts.
An HMRC spokesman said: “Taxpayers welcome the option 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.”
Other recently announced tax powers include the Direct Recovery of Debts scheme, which will allow HMRC to take money directly from peoples bank accounts if they are believed to have unpaid taxes.
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.”
In addition, from next month the Government’s ‘accelerated payment’ rules will become active, forcing businesses and individuals to pay disputed tax before their cases are heard in court.
