Tax

Storm Gathers Over UK Plans To Seize Owed Taxes Without Legal Clearance

Tom Burroughes, Group Editor, London , 12 May 2014

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A political storm is brewing in the UK over plans by the government to let the national tax authority seize taxes owed from private bank accounts without a court order.

A political storm is brewing in the UK over plans by the government to let the national tax authority seize taxes owed from private bank accounts without a court order.

Finance minister George Osborne set out in his annual budget, held in March, plans to allow HM Revenue & Customs to make such seizures, part of a general push by the administration to continue its drive against alleged tax cheats in the UK. The move is part of a wider drive by the administration to hunt tax evaders, and certain kinds of tax avoiders, in the UK and overseas.

The move, however, has already sparked criticism from lawmakers in parliament, such as the influential House of Commons Treasury Select Committee. It issued a report on the matter last week. It is feared such powers violate due process of law. Such worries are not confined to the UK; in recent years, the German government used taxpayers’ money to buy stolen bank data from Switzerland, whereas the US government, with its worldwide system of tax, has enacted sweeping extra-territorial powers to hunt down alleged tax dodgers abroad.

There are also concerns that developments such as the government’s General Anti-Abuse Rule, or GAAP, create wide-ranging, but vaguely defined, powers that could be abused. There are also fears that the line between tax evasion – long regarded in UK law as a criminal issue – and tax avoidance – which has not been – have been blurred, making legitimate tax planning impossible.

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