HMRC should not bypass courts – CIoT's Fairpo

A STARK WARNING has been issued to HM Revenue & Customs by CIoT president Anne Fairpo, over an increasing powerbase that is allowing it to sidestep the courts.

Powers to directly deduct tax debts from taxpayers’ bank accounts without the intervention of the courts have proven controversial, with the ICAEW branding the move “unconstitutional” in July.

Under the plans, HMRC will be able to deduct tax owed directly from the accounts of debtors, providing at least £5,000 is left across all their accounts including ISAs. It is estimated around 17,000 taxpayers will be affected each year.

Similarly, the introduction of strict liability for failure to declare overseas income and gains, which advisers warn “presume guilt” has drawn widespread opprobrium from the profession.

Speaking at the CIoT’s presidential reception, Fairpo (pictured) argued that if the court system is not working adequately it should be reformed to work better for all who need to use it, rather than simply allowing the tax authorities to sidestep it.

She said: “I am concerned about the increasing focus on HMRC enforcement without third party supervision. There is, and can be, no dispute that HMRC needs to enforce tax debts. There’s no dispute that we have a societal infrastructure that needs to be paid for.

“In a perfect world, perhaps HMRC wouldn’t need the courts – but then again, in a perfect world, no-one would need the courts. This is not a perfect world. People make mistakes. HMRC makes mistakes,”