George Osborne Defends HMRC Power To Take Money Direct From Bank Accounts

Osborne Defends Power To Take Money Direct From Your Bank Account
|
Open Image Modal
Chancellor of the Exchequer George Osborne uses a Lloyds Cashpoint machine to withdraw some money during a visit to a branch of Lloyds TSB on The Strand, in central London.
Luke MacGregor/WPA-Rota

George Osborne has been forced to defend plans to let the taxman go into Britons' bank accounts for money believed to be owed in unpaid taxes after MPs branded it a "mad idea that should have been strangled at birth".

Lib Dem MP John Thurso made the attack when the chancellor appeared before the Treasury select committee, as he questioned why HMRC would get the "power to delve into people's bank accounts without judicial oversight".

Thurso rebuked the chancellor for choosing to "slip [the plan] through in two paragraphs" in last month's Budget Red Book "without any thought about the implications".

He added: "It is a massive change in the constitutional arrangement. This is a huge change, the next thing is that other people will just say 'Oh we'll have a dive into your bank account".

Tory MP Andrew Tyrie, chair of the committee, warned that safeguards to stop officials overreaching the limits of their new power risked being "eroded".

Osborne's new measure for HMRC officials to be able to dive into bank accounts for money they think is owed has provoked widespread outcry, as critics warned it risked making officials a "law unto themselves".

In response to the committee's concerns, Osborne said that the Department for Work and Pensions already had the power in relation to child maintenance payments.

"The vast majority of people pay their taxes on time and the people who don't pay their taxes are a burden on everyone else, and the taxes have to be higher on everyone else as a result."

"Some people who have been contacted on average nine times by the Revenue, and have exhausted all their appeals," he pointed out, which would work as a "judicial safeguard".

Under the proposal, officials will only be able to use the power for Britons who have been asked "multiple times" by debt collection officials to pay, and must leave at least £5,000 in the account.

Once HMRC takes the money, the taxpayer will have 14 days to get in touch and set up a payment plan, otherwise officials will keep what they have taken.

Osborne's Budget also gave HMRC the power to take money from those they suspect of unfairly avoiding tax, with money only handed back - with interest - if the taxpayer wins a legal challenge in the courts.

Dr Eamonn Butler, director of the Adam Smith Institute, told HuffPostUK: "I am always very suspicious when officials take power to remove people's assets. There are already perfectly good laws obliging people to pay their bills, including their tax bills. And there are punishments if they don't – but those punishments only come after the sentence of a court.

"If we allow the authorities to take cash from our accounts for any amount they think we owe them, then none of us is safe. They become a law unto themselves. This is a very worrying threat to civil liberties. And just because it is done by other countries, that do not have our common-law safeguards, is no reason for us to do it."

Emma Carr, deputy director of Big Brother Watch, warned: "Today the taxman has to go to court to seize your money. Now he'll be able to do it with a click of a mouse. People won't object to HRMC having legal powers to pursue people who owe them money but they shouldn't be able to do it without any independent oversight.

"At a time when the government is looking to rein in the number of public officials who can enter your home without a warrant it is bizarre that the taxman is getting the power to raid your bank account. These powers could have a serious impact on people's lives and as a basic step of protecting peoples liberties they should not be exercised without a court's approval."

George Osborne Looking Awkward With Voters
Currency options for an independent Scotland report(01 of20)
Open Image Modal
The Chancellor of the Exchequer George Osborne with worker Craig Nicol during a visit to the CNC milling section at Castle Precision Engineering in Glasgow after the launch of the Scotland Analysis paper on Currency and Monetary Policy in Glasgowl. (credit:PA)
Osborne visit to Gloucester(02 of20)
Open Image Modal
Chancellor George Osborne speaks with tutor Alan Gribble (left) and 1st year apprentice George Scott in the Electrical/Electronic workshop at Gloucestershire Engineering Training, in Gloucester. (credit:PA)
Osborne visit to Gloucester(03 of20)
Open Image Modal
Chancellor George Osborne speaks with apprentice Jasmine Shellard in the Electrical/Electronic workshop at Gloucestershire Engineering Training, in Gloucester. (credit:PA)
Osborne visit to Gloucester(04 of20)
Open Image Modal
Chancellor George Osborne speaks with apprentices Jasmine Shellard and Luke Mellerup in the Electrical/Electronic workshop at Gloucestershire Engineering Training, in Gloucester. (credit:PA)
GDP figures(05 of20)
Open Image Modal
Chancellor George Osborne is shown how to play an internet security game called 'Capture' by the man who made it Howard Kingston, Co-founder & CEO of Future Ad Labs during a visit to Unruly Media in east London. (credit:PA)
Osborne visits cardiff(06 of20)
Open Image Modal
Chancellor George Osborne meets parents and toddlers including Angharad Evans (right) and her daughter Isla Evans-Brown, three, at Daisy Day Nursery in Llanishen, Cardiff to talk about UK Government plans to help working families with childcare costs. (credit:PA)
Budget 2013(07 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne meets with Rick Newton and Emily Sandercock at who have recently bought an apartment at the Berkeley Homes Royal Arsenal Riverside development in Woolwich, London the day after he delivered his Budget Statement. (credit:PA)
George Osborne visit to Birmingham(08 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne (right) is given a demonstration on hallmarking by hallmarking supervisor Rose Nightingale (left) and hand hallmark Rose Grove at the Birmingham Assay Office. (credit:PA)
George Osborne visit to Birmingham(09 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne is given a demonstration of gold analysis by Karen Kempson at the Birmingham Assay Office. (credit:PA)
Eastleigh by-election(10 of20)
Open Image Modal
Chancellor George Osborne wears a high visibility jacket as he makes a visit to the Prysmian Group factory and speaks to (L- R) employee Raj Guru, factory manager Steve Price, CEO Paul Atkinson and Conservative candidate Maria Hutchings in the constituency of Eastleigh, Hampshire. The Conservative party minister visit to the energy and telecom cable maker was to meet the party's candidate Hutchings ahead of the Eastleigh by-election on February 28 to elect a new MP, after Chris Huhne was forced to resign. (credit:PA)
George Osborne visit to Birmingham(11 of20)
Open Image Modal
Chancellor of the Exchequer George Osbourne tries his hand at hallmarking with hand hallmarker Faye Grove at the Birmingham Assay Office. (credit:PA)
Eastleigh by-election(12 of20)
Open Image Modal
Chancellor George Osborne wears a high visibility jacket as he makes a visit to the Prysmian Group factory and speaks to factory manager Steve Price (centre) and employee Raj Guru (left) in the constituency of Eastleigh , Hampshire. The Conservative party minister visit to the energy and telecom cable maker was to meet the party's candidate Hutchings ahead of the Eastleigh by-election on February 28 to elect a new MP, after Chris Huhne was forced to resign. (credit:PA)
Banking Reform Bill(13 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne, (right) watches as gardeners spread mulch in the grounds of JP Morgan's campus, in Bournemouth, after he gave a speech on banking reform at the campus. (credit:PA)
HS2 high-speed rail plan(14 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne talks to workers as he takes part in a tour of the train wheel manufacturers Lucchini UK, at Trafford Park, Manchester. (credit:PA)
Conservative Party Conference 2012(15 of20)
Open Image Modal
Chancellor George Osborne meets staff and students at the University of Birmingham's Metallurgy Dept before addressing the Conservative Party conference in Birmingham today. (credit:PA)
Osborne visits Google Inc's tech campus(16 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne, during a visit to Google Inc's Tech Campus during the official opening at East London's Tech City. (credit:PA)
Osborne visits Google Inc's tech campus(17 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne, during a visit to Google Inc's Tech Campus during the official opening at East London's Tech City. (credit:PA)
Chancellor visits the North West(18 of20)
Open Image Modal
Chancellor George Osborne is with shown around by staff member Jan Milton-Edwards during a visit to the Macclesfield AstraZeneca site in Cheshire. (credit:PA)
Christmas party for politicians' children(19 of20)
Open Image Modal
Chancellor George Osborne (left) laughs at Shadow Chancellor Ed Balls (right) dressed as Santa Claus at a Christmas party for MPs' children in the House of Commons, London. (credit:PA)
Chancellor's Annual Christmas Party For Charity(20 of20)
Open Image Modal
Chancellor of the Exchequer George Osborne paints a money box with children at Number 11 Downing Street as he hosts his yearly Christmas party for the Starlight charity. (credit:PA)