HMRC will lose power to directly access bank accounts, says Osborne

Chancellor of the Exchequer, George Osborne, has outlined plans to revise laws that allow HM Revenue and Customers to dip into bank accounts to collect bad taxes.

Under the revised plans, the time allowed for taxpayers to appeal before tax raids will be extended from 14 days to 30 days.

In the first instance, appeals will be made to HMRC, but if debtors contest the ruling made, they will be allowed an extra 30 days to appeal to the County Court for independent judicial review.

Powers currently allow HMRC to seize assets from anyone who owes more than £1,000 in tax or tax credits. However, the revised plans will force HMRC to hold face-to-face meetings with debtors before enforcing the repayment of any debts owed.

Financial Secretary to the Treasury, David Gauke, explained further changes to the regulation: "Only debtors who have received this face-to-face visit and are not identified as vulnerable, have sufficient money in the bank and have still refused to settle their debts, or enter an appropriate Time to Pay arrangement, will be considered for debt recovery.”

Currently, around 17,000 people are estimated to fall into this category, owing an average of £5,800 each.