HMRC's upcoming new powers, which allow it to recover tax debts directly from bank accounts, raises questions about how the taxman calculates debt. The new powers, unveiled by Chancellor John Healey in the Budget, effective from July 2029, will allow HMRC to automatically deduct debts from holders who fail to engage with the taxman despite being able to pay.
HMRC's new powers raise concerns over burden of proof
UKPulse Money DeskHMRC is set to gain new powers to recover tax debts directly from bank accounts, but experts are concerned about how the taxman calculates debt and distinguishes between refusal and inability to pay.
- HMRC will be able to automatically deduct debts from holders who fail to engage with the taxman despite being able to pay
- The new powers extend to tax debts up to £5,000 for current and savings accounts, and up to £10,000 for companies
Why this matters: The success of the measure will depend on robust safeguards and ensuring it is used proportionately where debts are undisputed, and other recovery options have been exhausted.
What this means for you: Compliant taxpayers are unlikely to be affected, but the new powers may impact those who fail to engage with HMRC despite being able to pay their debts.