Proposal to allow HMRC to seize unpaid tax criticised by MPs

The Tory-led Coalition's proposal to allow the taxman to seize money directly from people's bank accounts without their permission has been criticised by the Treasury Committee.

The Coalition wants give HM Revenue & Customs (HMRC) powers to withdraw cash from banks, building society and ISA accounts of people who owe the taxman money without seeking their permission. The taxman will also be capable of dipping into joint accounts, even when one person of them owes nothing to the Treasury.

While Ministers have claimed that the measure would help the government rake in additional £375 million over the next four years from those who owe unpaid taxes; Treasury Select Committee Chairman Andrew Tyrie argued that it was "very concerning" because HMRC doesn't always ask for the right amount.

Criticising the proposal, Tyrie said, "The proposal to grant the power to HMRC to take money directly from people's bank accounts is very concerning. Some taxpayers may find money taken from their accounts that later should be paid back. That would be unacceptable."

The draconian measure was announced Chancellor George Osborne in his Budget in March this year. However, the measure will be accompanied by a number of safeguards.

The measure could apply to those who will owe more than £1,000 to the taxman, though tax collectors would have to make sure that at least £5,000 remains in the account they plunder. Moreover, tax collectors would attempt to contact a tax defaulter at least four times before withdrawing any cash from his/her bank account.