In the 2014 Budget, chancellor George Osborne outlined plans to reclaim tax from those who owed the Treasury in excess of £1000 in unpaid tax.
The government estimates that the “Direct Recovery of Debt” (DRD), will recover £65m from 2015-2016, with that figure increasing over a five-year period.
According to HMRC, the cost of implementing DRD from 2014-2019 is expected to weigh in at £800,000 for the full five years.
Previously, concerns were raised by the profession, including ICAEW, over HMRC’s ability to prevent innocent parties from being wrongly taxed.
David Gauke, exchequer secretary to the Treasury, said the measures would bring the UK in line with its peers and would become a valued part of “HMRC’s toolkit.”
He added, “It will help to level the playing field between those who pay what they owe, when they owe it, and those who do not.
“It will help ensure that compliant businesses do not face unfair competition from others who try to gain an undeserved financial advantage by dodging or delaying their tax payments.”
A HMRC spokesperson insisted the proposed plans would only affect hardened, serial debtors, who had defaulted regularly on tax payments.
Ronnie Ludwig, partner at Saffery Champness, said he believes the proposed scheme lacks sufficient insight, allowing HMRC to become "judge and jury".
“HMRC should not be able to raid people’s bank accounts without gaining the permission of the courts first. Recently HMRC has also gained the power to demand tax in dispute upfront, before appeals or court hearings have taken place. We seem to be witnessing a creeping extension of executive government power.
“The consultation does not properly address a scenario under which a person or company goes bankrupt. If HMRC can recover money without going to court but others must, this could put the Revenue in position where it is effectively preferred creditor, a status which it lost in 2003," he added.