Debt advice charities have welcomed a change to the Finance Bill on HMRC’s new power to recover debts directly from personal bank accounts.
The amendment says HMRC must consider whether a person is at a particular disadvantage in dealing with their Revenue and Customs affairs and act accordingly.
StepChange Debt charity and Money Advice Trust responded to the change after it was debated at parliament yesterday (October 16).
Peter Tutton, head of policy at StepChange Debt Charity, said: “We are pleased to see that the government has responded to concerns that HMRC’s new power could have a negative effect on financially vulnerable people.
“This important safeguard should ensure that this new power is only used in the appropriate circumstances.”
Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “As with any other creditor, it is essential that HMRC takes into account debtors who are vulnerable in its debt collection practices.
“We are pleased that the government has agreed to amend the Finance Bill to address this concern, and that vulnerability will now be taken into account as HMRC uses its new powers for the direct recovery of debts.”
Elson added that the charity remains concerned about the impact these powers will have on other groups, including small business owners – and pledged to press for additional safeguards to be introduced for SMEs.
Under the direct recovery of debt rules, HMRC will have to establish a debt is owed by a taxpayer of at least £1,000. The tax authority will also have to contact the taxpayer at least four times, including a face to face meeting, before the DRD procedure is triggered.
HMRC will also send the bank an information notice which requires the bank to provide details of the accounts held by the taxpayer.
By Marcel LeGouais