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Opposition to direct recovery of tax debts continues to grow
KEY POINTS
- E-petition launched that can be supported both by those who want prior oversight and those who want the proposals to be completely abandoned.
- Support from the major accountancy and tax institutions, and on social media by a large number of readers and well-wishers; more press coverage may follow.
- Potential threat is mainly to your clients’ bank accounts, so why not get them involved?
- Accountants who have written to their clients about the e-petition have had very good feedback from them.
What has been happening since we launched our campaign against the proposals for direct recovery of tax debts from the bank accounts of taxpayers?
Having encouraged readers to respond personally to the consultation, I explained in my article A power too far that we intended to continue the campaign in various ways, focusing initially on an epetition.
At that time I did not have one to point you towards, because the existing ones seemed to have defects of one sort or another.
E-petition for everyone
We put our own together and got it on the government site. It is petition 68384. The wording is deliberately designed to attract support from those who have two different approaches to the proposals.
There are some people for whom these powers are simply, as the hashtag says, a power too far, and they will never be acceptable.
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Withdraw the proposals to introduce direct recovery of tax debts from taxpayers’ bank accounts in Finance Act 2015.
These proposals have been widely criticised [by representative bodies, charities and civil liberties groups] as poorly conceived, unworkable, and severely deficient in safeguards. They should not be implemented in Finance Act 2015. Instead, they should be withdrawn and sufficient time given to carry out a wide-ranging consultation on the problem of deliberate non-payment and potential solutions. |
For those people the most important point is the withdrawal of the proposals, and they would argue in the consultation which followed that there was either no need for new legislation or that it should be something completely different from that currently proposed.
For others, however, the key issue is the lack of independent oversight prior to the exercise of the new powers. This was one of the key points raised by the CIOT in its response to the consultation, for example:
“Ideally, we would like to see some form of judicial oversight of the provisions from an independent source, like the FTT, as an additional safeguard at a much earlier stage in the process.”
However, the inevitable common ground between both groups is that the proposals should not be included in Finance Act 2015; still less in the draft bill that will be published in just over three months’ time.
Even for those who only want to see prior independent oversight introduced, there is insufficient time in the run-up to an election year for such a system to be properly devised and consulted on, at a time when the attention of our political masters is elsewhere.
So both sides should be able to support our petition, and to then have the discussions in the consultation period that follows to determine the right way forward. If that involves legislation, it can be in 2016, under a government that has time to concentrate on it.
Thank you, thank you…
The petition was remarkably successful. In my own mind, I had a target of being in four figures by the time parliament came back from recess on 1 September. The petition was approved by the government website on 7 August, giving us a little under four weeks to reach that target.
Well, we hit it in a week, and the numbers have been growing at a slower but still steady pace ever since. As I write this on the Monday before publication, we have just gone over 1,300, and we are rarely out of the list of top 10 trending petitions.
Getting there was the result of a great deal of support from a large number of people. The ICAEW Tax Faculty has been extremely supportive, including the petition in its newswires, publicising it on its website and retweeting it.
ACCA has also been very helpful, pushing the story (along with others) to the mainstream press. There was a brief mention of the petition in the Daily Mail recently, following a piece about the new proposals in an earlier issue, and the Financial Times had a very strong leader on 18 August criticising the proposals.
By the time you read this there may well have been other coverage. Thanks also to many friends, too many alas to mention, who have constantly repeated our tweets, Linkedin alerts, etc.
Tell your clients
So I would ask you, if you haven’t already signed the epetition, to do so. But if you have already signed it, what else can you do?
If you are on Twitter or use other social media, please publicise it to others, using #APowerTooFar. But the most effective thing you can do may be to involve your clients.
I was going to say that the reason for that is that their bank accounts are the ones that are at risk, not yours, but the story on the Ross Martin Tax Consultancy blog, reproduced below, is a startling reminder that yours might be.
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According to HMRC Ross Martin Tax Consultancy Limited had a “PAYE underpayment” which we knew did not exist. Not one of four letters to our tax office was answered. HMRC Debt Management continued to send out payment demands even when we wrote back full explanations and sent details of all our payments and the dates cleared. Meanwhile we had an overpayment on corporation tax; this was not the same as the PAYE “underpayment” so we reclaimed it and it was repaid. After more time-wasting and letter-writing in response to payment demands, HMRC “found” the missing PAYE payment. Somehow they had allocated it back to a previous year, and then reallocated another payment to the wrong year and the balance to our corporation tax account... This could have been sorted out if HMRC had sent us what we continually requested – a summary of what they thought we had paid. Even a 10-year-old would then have been able to “spot the difference” and we could have then identified the actual payment and date. The result was that HMRC wasted a lot of all our time over a six-month period because the office with the right computer failed to correspond. Under the Direct Recovery of Debt proposals HMRC would have the power to deduct the “underpayment” (which of course did not exist) and we would then have to go to judicial review, ie engage a barrister to review whether HMRC has acted fairly. Cost to us? In the region of £2,500 to £10,000. Absolute madness. |
Nevertheless, the majority of comments made on other websites concern clients. John Mirow, on the ICAEW Tax Faculty website, said:
“We have just had the perfect example of why HMRC should not have these powers.
“Our client received a letter from HMRC debt management and banking demanding unpaid tax and interest of more than £21,000, referring to previous attempts to get the client to pay (although no previous demands had been received). After investigation, with help from the HMRC Agent helpline, we determined that the liability arose from an assessment raised for 2008/09 which had been paid in November 2012.”
On AccountingWeb, “ashbury” gave details of his experiences under the French version of the same power (HMRC are keen to stress that similar powers work well in other countries):
“I recently had the experience of the French tax man dipping into my bank account without consultation or warning of any kind after he said that I’d failed to respond to previous demands – demands that he’d sent to an address that I’ve had no connection with for over two years. Resolved, but only after he’d grabbed the cash that he thought he was entitled to, to my personal detriment and inconvenience.”
So why not write to your clients, and draw their attention to the new proposals, and to the epetition if they want to express their views?
Some accountants have already done that, and have had a tremendous response. Paul Aplin, a former ICAEW Tax Faculty chairman and a partner in a West Country practice has emailed a number of clients who have all been quick to sign the petition and to thank him for giving them an opportunity to express their concerns.
The comments he received included:
“Thanks for letting me know about this important issue”
“I agree with your stance entirely, and am glad to be asked to participate and lobby”
“With regard to the petition, now signed – I totally agree with your comments that this could be a very slippery slope”
“Will do. Totally agree with you, it’s outrageous”
So it turned out to be a very positive engagement with his clients, as well as gathering new signatures for the petition.
Why don’t you try emailing a small number of clients to test it out, and then if the response is positive send out a wider email?
