Pay_TaxAgility-Accountants-LondonFirst announced at March’s Budget 2014, the Government’s plans to grant HMRC the power to significantly increase the amount of money it can take from individuals’ pay packets for repayment of debts was picked up by The Daily Mail recently.

Though it shouldn’t come as a shock that The Daily Mail would jump on a topic such as this with venom, these changes certainly shouldn’t be ignored if you’re in the higher tax bracket and have been repeatedly disregarding communications from HMRC.

The Facts

From April 2015 the upper limit to what HMRC can take directly from an individuals’ pay or bank account will increase from £3,000 to £17,000 for anybody earning more than £90,000 a year and (this is the important part) who has been contacted at least four times by HMRC about the issue, to no response.

Those earning less than £30,000 will remain at the current £3,000 limit, while those earning in-between £30,000 and £90,000 a year will have an upper-limit increase based on their pay level.

Focusing on individuals who owe them at least £1,000 in unpaid income tax, Capital Gains Tax (CGT), or National Insurance Contributions (NICs), HMRC will have the power to take repayments directly from your pay packet using a new tax code that’ll be introduced in April 2015, with them also being able to collect debt directly from your current accounts, joint accounts, or ISAs.

Chief Executive of HMRC Lin Homer was clear in saying that any money that’s collected from debtors in this manner would be spread out over a twelve-month period.

Opposing Views

Speaking enthusiastically of the upcoming changes at Budget 2014, Chancellor of the Exchequer George Osborne said:

“I am increasing HMRC’s budget to tackle non-compliance… we will give HMRC modern powers to collect debts from [the] bank accounts of people who can afford to pay but have repeatedly refused to, like most other Western countries.”

Needless to say these new increases don’t sit as well with everyone as they do with Mr. Osborne, with Chas Roy-Chowdhury, the head of taxation at the Association of Chartered Certified Accountants (ACCA) being quoted in The Daily Mail piece as saying:

“This is another creeping of HMRC’s powers, which are skewed in favour of themselves and away from the taxpayers. HMRC is becoming a more confrontational and all-powerful organisation.”

Accelerated Payment Notices (APNs)

The anger surrounding these changes from Chas Roy-Chowdhury, and others, most likely isn’t helped by the Government’s recent introduction of Accelerated Payment Notices (APNs), which we wrote about in detail back in August.

In short, HMRC are currently contacting contractors who they believe have been investing in tax avoidance vehicles, with the stipulation that said contractors must pay the tax HMRC believe is owned to them before appealing their case; something which many believe is a gross intrusion and overinflation of HMRC’s powers.

Want More Details on HMRC’s New Salary Grab?

To speak with a professional to discuss dealing with communications from HMRC and any repayments they believe you owe, contact us today on 020 7129 1199 or get in touch with us via our contact page to arrange a complimentary, no-obligation meeting.


This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.