Tax reclamation powers increased

30 Sep 2014

Debt recovery powers for HM Revenue & Customs (HMRC) are set to allow up to £17,000 in unpaid tax to be taken directly from salaries.

Currently, HMRC is able to take back up to £3,000 worth of debt from a debtor’s pay packet.

The £14,000 rise has prompted strong reactions, particularly from high-earners whom this new measure will affect most of all. Those earning less than £30,000 per year will only be subject to the original £3,000 reclamation limit, while a sliding scale means those earning over £90,000 will face the new £17,000 limit.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA), said: ‘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’.

The new measure is hoped to raise £115 million for the treasury.