HMRC’s plans to secretly access bank accounts revealed

George Hay Chartered Accountants

HM Revenue & Customs’ (HMRC) plans to secretly access bank account information have been revealed in a document titled “Amending HMRC’s Civil Information Powers”[1], which was published on the HMRC website on 10th July.

In the report, HMRC argue that the changes will enable them to better ‘respond to non-compliance’ and to ‘carry out its functions more effectively’.

The planned new powers relate to ‘information orders’, which are used by HMRC to determine whether taxpayers are paying the appropriate amounts of Income Tax, Corporation Tax, Capital Gains Tax and VAT.

Banks, building societies, accountants, lawyers and estate agents can all be ordered to disclose sensitive financial information, pertinent to the individual that is being investigated.

Currently, these groups are free to notify their clients, if HMRC asks for access to such information, but under the new plans they would no longer be able to do so.

If a taxpayer refuses access to the information, HMRC can only pursue the demand with the permission of a Tribunal. However, officials are now calling to have this regulation relaxed so that only ‘secretly accessed’ accounts would require Tribunal approval.

This idea has come under fire from critics who have warned that we will undoubtedly see HMRC using these powers more and more, were the rules to be relaxed.

James Daley, the Managing Director of Fairer Finance, said: “The system we have got contains essential protections for taxpayers’ privacy and rights. The idea that HMRC can request information from people’s banks, estate agents and other third parties without notifying the individual is shocking.”

“Of course, we want to crack down on people who aren’t paying their taxes, but there has to be a balance between that and breaching privacy. This can’t be a lazy shortcut for the taxman.”

A spokesman for HMRC said: “We are simply consulting on updating existing powers to obtain account information to help establish the right tax has been declared.”

“If these powers became law, we expect they would only apply to a few hundred cases each year and of course there will be safeguards in place to protect taxpayers.”

It is thought that HMRC will focus on targeting international tax dodgers with these new powers, but it’s worth bearing in mind that domestic cases are not exempt.

Carol George, Tax Manager at George Hay, said: “Granting the taxman the authority to access taxpayers’ bank accounts, without notifying them, is a worrying step that ultimately undermines people’s fundamental rights.”

“In seeking to access people’s bank accounts in secret, HMRC appears to be stretching its powers beyond what many deem to be acceptable.”

“There are, of course, those individuals who do deliberately evade paying tax, and tackling that should continue to be a priority. However, the concern for ordinary people is that HMRC could be scrutinising your financial information and you would be none the wiser.”

HMRC are now accepting public comment on these proposals until 2nd October 2018.