The government wants the power to investigate your finances without your permission

The government wants the power to obtain financial information about self-employed taxpayers without getting their permission first. It’s part of its aim to ‘maximise revenues due’ and tackle non-compliance, but experts say it’s a breach of privacy.

HMRC has the power to obtain relevant information from taxpayers to check they’re paying the right amount of income tax, Capital Gains Tax, Corporation Tax and VAT. This information is sometimes held by third parties, and if they want to see it, they can issue a ‘third party notice.’

Third parties include banks and other financial institutions, as well as lawyers, accountants and estate agents.

HMRC can’t issue a third-party notice without the approval of the taxpayer or a tax tribunal. It also needs to prove that the information is ‘reasonably required’.

And if HMRC has got permission from the tribunal to keep its investigation secret, the third party is still legally allowed to tell the taxpayer they’ve been asked for the information.

But all this could be set to change. In a recently launched consultation document HMRC proposes they remove these safeguards. This could give them the ability to look at your bank account and financial information without your permission.

Tax officials say the current process is bureaucratic and too resource-intensive, and that the safeguards are disproportionate.

HMRC’s key proposals are:

  • to remove the need to get approval from the taxpayer or tribunal before issuing a third party notice (the taxpayer would be given a summary of the information needed).
  • if the tribunal gives permission for the taxpayer to be kept in the dark about an investigation, the third party would be legally prevented from telling the taxpayer they’ve been asked for the information.

John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Giving the taxman powers to access taxpayers’ bank accounts without notifying them is a sinister step that would undermine fundamental freedoms.”

HMRC says that nothing has been decided, and if the proposals become law, they would only apply to a few hundred cases each year.

  •  
  •  
  •  
  •  

Leave A Comment

Latest News