George Osborne’s announcement that a series of safeguards and improvements will be put in place for the direct recovery of debt is good news for tax payers’ confidentiality.

While ACCA would have preferred the power were not being proposed at all, we consider where we are today is light years better than what was originally being proposed.

There will now be a totally different ethos behind the way the power will be designed and implemented. It will no longer be played out as a remote controlled video game where HMRC remotely takes money out of the taxpayers account. There will now need to be face to face engagement between HMRC and the tax payer before anything can happen. Vulnerable tax payers will be identified and taken out of the process entirely and put in touch with a dedicated helpline.

We are pleased that the appeal process has been extended from the original 14 days proposed to 30 days, in addition to which a further 30 days will be allowed for the tax payer to go to the County Court for independent judicial review, where the funds in the account will not be touched by HMRC. 

Only once a tax payer has been fully vetted by face to face contact and then gone through a much longer and detailed appeals process will anything happen on the DRD front. This is should mean only those who really are determined to escape their obligations to pay tax shall have this proposed power used against them.

In addition we consider it’s a good day for tax payer confidentiality as the new powers will be restricted to only asking the bank or building society for the balance in the account rather than 12 months information. 

From a preferential creditor’s point of we were concerned that HMRC will jump the queue with this power. So we are pleased to also know that they will ensure this does not happen and they in fact repay to the liquidators any money ceased prior to the business going in to liquidation.

ACCA will make every endeavour to ensure the Government does not subsequently seek to strengthen these powers post implementation. Our initial feedback was forthright in criticisms of the original proposals, and it is because of our stance that arrangements have changed. Basically we have won every concern on safeguards we were looking for on the Direct Recovery of Debt. So it will still be in legislation, but a lot of its teeth will have been knocked out.

ENDs

For more information, please contact: Shane Finnegan or Katrina Frazer at Aiken PR on 028 9066 3000 or email firstname@aikenpr.comShane Finnegan – 07764534565Katrina Frazer - 07856467579

For further comment please contact: Chas Roy-Chowdhury, Head of Taxation – ACCA, on mobile: +44(0)7710 707 516

Notes to Editor

Notes to Editors1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.2. We support our 170,000 members and 436,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.