HMRC can now raid your bank account to claim unpaid tax money, warn experts. Claire Cox, who runs social media page Debt Crisis To Clear UK, has posted a video explaining how the government has boosted its debt recovery powers this year.
She warned that HM Revenue and Customs [HMRC] 'isn't like other creditors' because it doesn't need permission from a county court to take enforcement action.
The government department is in charge of collecting income tax, national insurance and VAT so people who are self-employed deal with them directly.
She warns that HMRC can visit homes and businesses to remove goods to the value of debts but she also references a newly boosted power.
From April they've been able to use a Direct Recovery of Debts [DRD] method, which allows them to take money directly from debtors' current or savings accounts.
This power was active before the Covid 19 pandemic but was paused during the crisis and has returned this year.
The government say there are safeguards in place to ensure those in debt 'do not suffer undue hardship'.
These are that DRD will only be used once the timetable of appeals have expired and a face-to-face recovery visit has been made.
Businesses may not receive a face-to-face visit but they insist 'multiple opportunities' will be given to discuss repayment.
Only accounts with more than £1,000 will be considered for debt recovery by DRD and no less than £5,000 will be left in the account.
Once the money has been seized there will be a 30-day window for the debtor to object or appeal and during this time it will be held with the respective bank but frozen from use.
HMRC say no money will be transferred to them until the 30-day period has passed and a decision on objections will be made within 30 days.
Claire, who has almost 15,000 followers on her social media pages, warns anyone struggling to pay their HMRC bills to contact the department.
She says 'ignoring them makes everything worse' and references how payment plans can be offered to avoid DRD measures being implemented.
Claire said: "HMRC is not like other creditors, so if you're self-employed and have a debt like unpaid national insurance, VAT or income tax, you need to understand something very important.
"Most creditors, credit cards, loans, have to get a county court judgement before they can take any enforcement action, but HMRC does not.
"They have their own enforcement powers, they can visit your home or business to remove goods and they can apply directly to make you bankrupt.
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"There is also one power that most people don't know about - HMRC can recover debt directly from your bank account without going to court and obtaining a judgement.
"This is under the Direct Recovery of Debts legislation. Your money can be taken before you've had a chance to dispute it.
"This doesn't mean there's nothing you can do. HMRC will negotiate and they do payment plans so if you're struggling you have to contact them first.
"Ignoring HMRC makes everything worse and much faster than ignoring almost any other creditor."
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