Finance Bill amendment protects vulnerable taxpayers, says pressure group

The controversial measures that will allow HMRC to recover debts direct from taxpayers’ bank and building society accounts have been amended to protect vulnerable taxpayers.

The Low Incomes Tax Reform Group (LITRG) has welcomed the announcement of an amendment to the Finance Bill dealing with ‘enforcement by deduction from accounts’.

Protection

The new process, also called ‘direct recovery of debt’, will now mean that HMRC has to take into account any disadvantages that result for a taxpayer if the measures were to be used against them.

Each debtor will now likely need to have a face-to-face meeting with an HMRC representative, who will make an assessment of whether or not the individual should be classed as  'vulnerable' in relation to dealing with his or her tax affairs.

Right target

Anthony Thomas, chairman of the LITRG said: “This amendment is a significant step forward in protecting vulnerable taxpayers."

“Our primary concern is that the vulnerable taxpayer or tax credit claimant on a low income who gets in a muddle should not be caught up in a process designed to target those who have the funds to pay their tax on time but who resolutely refuse to do so," he explained.

Other new safeguards will be set out in primary legislation, which means that they will be an integral element of the new laws granting HMRC their powers. However, the face-to-face meeting requirement will not be included at this level, so there is some confusion as to how HMRC will be obliged to put this part of the procedure into operation.