Tax & Accounting News

HMRC given new powers to deduct from salaries

06/07/2009

HM Revenue and Customs (HMRC) is set to be given new powers to deduct up to £2,000 from taxpayers’ salaries in order to recover debts.

At present, HMRC must obtain taxpayers’ consent or be given a court order before it can deduct money owed to it from PAYE, but under the Finance Bill – due to be passed in the next few weeks – the onus switches to the taxpayer, who must appeal in order to prevent a deduction, once it is instigated.

HMRC could also use the legislation to quickly claw back any overpayments wrongly made to taxpayers.

However, some experts have expressed concern that giving HMRC automatic priority in this way could leave taxpayers struggling to meet their other bills. It would also mean other creditors could be at a disadvantage as HMRC would be at the front of the queue, able to make deductions quickly, while the remaining creditors had to pursue debts through the courts.

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