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Solicitors criticise tax debt recovery proposals

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The City of London Law Society has called for the direct recovery of debt (DRD) proposals to be dropped in response to HMRC’s much-discussed public consultation Direct recovery of debts, which closed on Tuesday. In an open letter to Andrew Willis of HMRC, Simon Yates, chair of the organisation’s Revenue Law Committee, wrote that the proposals were ‘radical and controversial’, adding: ‘We have two fundamental objections to the proposals: the fact that it will be HMRC, and not the judiciary, making decisions on the application of DRD; and the real potential for mistakes to be made by HMRC and the adverse consequences that will have for taxpayers.’

Separately, the Law Society also objected to the proposals on grounds that: HMRC officers would in effect be acting as claimant and judge at the same time; the measures would put the state in a preferential position to other creditors, which would have to pursue their cases through the courts; the use of power without judicial supervision will lead to hardship where, as inevitably will happen, HMRC make mistakes; HMRC is proposing that a taxpayer is given too short a deadline of only 14 days to respond after the monies in his bank account are frozen before the monies are taken (30 days would be fairer as this is the same period in which HMRC are meant to respond to enquiries).