Chief Executive of the International Association of Book-keepers warns people over HMRC plans
Online PR News – 11-September-2014 – Kent – Proposals to allow HMRC to collect unpaid tax direct from bank accounts could have serious repercussions for businesses of all sizes, the International Association of Book-keepers (IAB) has warned.
Malcolm Trotter, Chief Executive of the IAB, the leading professional body for bookkeepers, said his members' experience of dealing with HMRC left him with grave concerns over the organisation’s consultation on Direct Recovery of Debts, a policy which, if it comes into force, would give it powers to recover tax and tax credit debts directly from debtors’ bank accounts.
At the moment, HMRC cannot recover debts from bank accounts without first obtaining a court judgement.
It argues that direct access will be quicker, will help level the playing field between those who pay what they owe and those who do not, and help ensure compliant businesses do not face unfair competition from those who try to gain an advantage by not paying tax.
"While we can see the attractiveness as regards increasing revenue received by HMRC, until it reduces its apparent error rate to next to nothing, we cannot support this proposal," said Malcolm Trotter.
"The vast majority of IAB members would argue that they regularly find errors in the calculation of personal tax codes, tax computations and bills issued by HMRC, coupled with long administrative delays in getting things put right."
The HMRC proposals are that Direct Recovery of Debts (DRD) would be used where there were established debts of at least £1,000, which could be made up of a number of smaller debts, and would only be used where HMRC had already made a number of attempts to contact the debtor to arrange payment, at least four times and typically nine times.
DRD would apply to debtors’ bank and building society accounts, including ISAs. The new powers would also apply to joint accounts.
"We’re not the only ones with doubts,” added Malcolm Trotter. “Other independent professional bodies such as the ICAEW report numerous cases of HMRC chasing debts which are not due.
“Any bookkeeper or accountant has a tale to tell about inaccurate information held by HMRC about their clients.
“If DRD is adopted, it could be a recipe for disaster for businesses of all sizes.”
Bookkeepers and accountants can be found easily online on the IAB Find a Bookkeeper page to give businesses managers a simple route to sourcing help for a qualified professional bookkeeper to look after the accounts.
To find out more about the International Association of Book-keepers visit the website.