The taxman has been given sweeping new powers to raid bank accounts and cash Isas to recover debts in a matter of weeks.
Small print in the Budget papers shows the Chancellor gave the green light to invasive enforcement powers for HM Revenue & Customs officials.
Anybody who refuses to pay money owed to the Revenue can now have the cash seized directly from their accounts.
It is estimated 17,000 a year could be targeted, owing an average £6,000.
Small print in the Budget papers shows the Chancellor gave the green light to invasive enforcement powers for HM Revenue & Customs officials
The move is part of a major Government crackdown on tax evasion, first proposed by the Chancellor last year.
The initial announcement outraged accountants and civil liberties campaigners who feared the new rules gave HMRC too much power.
Elaine Clark, managing director of accountant CheapAccounting, said: ‘It’s outrageous that this tactic has got the go-ahead.
‘HMRC has a terrible reputation for its service and not being able to get it right. Of course people should pay the correct amount of tax but until tax officials can get it right all the time, it’s a foolish idea.’
Since the new powers were first proposed, HMRC has been forced to introduce a number of safeguards.
It will ensure that those targeted will always have at least £5,000 left after any raid on their accounts.
Every debtor will first be asked to attend a face-to-face meeting with a tax official, and will be able to go through a county court appeal process.
The Budget announcement of the debt recovery powers is part of a wider move to give HMRC greater powers to go after tax avoiders to close the £37billion tax gap between what it is owed and what it actually collects
These safety nets were introduced after the initial outcry that mistakes could mean innocent households and the vulnerable were unfairly targeted.
The Building Societies Association warned that taxpayers fearful of losing money could take savings out of a bank and put cash under their mattress.
Official documents show HMRC anticipates it will raise £375million from the scheme between 2015 and 2019.
However, there are huge concerns about the Revenue’s ability to run such a scheme fairly as it desperately tries to shake off a reputation for shoddy customer service and incompetence.
The Budget announcement of the debt recovery powers is part of a wider move to give HMRC greater powers to go after tax avoiders to close the £37billion tax gap between what it is owed and what it actually collects.
The Chancellor also unveiled nearly £400million extra spending to boost its efforts to clamp down on tax dodging.
An HMRC spokesman said the raids on accounts ‘will allow us to go after a small set of people who refuse to pay up. There will always be a minimum of four attempts to contact them, and then a face-to-face appointment before any funds are taken.’
