Chancellor Rachel Reeves is plotting a tax raid on savers by making it easier for HMRC to dock workers’ pay, she has revealed.
09:55, 31 Mar 2025Updated 09:55, 31 Mar 2025
HMRC set to access bank accounts and ‘seize cash’ thanks to new powers
HMRC is set to “directly” access your bank account and seize money in a crackdown. Labour Party Chancellor Rachel Reeves is plotting a tax raid on savers by making it easier for HMRC to dock workers’ pay, she has revealed.
The Treasury is concerned that savers are failing to pay the tax they owe on interest, the newspaper has reported. Under a crackdown, HMRC staff will directly raid bank accounts to recover unpaid bills in an attempt to claw back billions lost to evasion and avoidance.
Account holders who have the funds to pay taxes they are believed to owe but “choose not to do so” risk having the cash taken out of their bank accounts in “direct recovery” powers.
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John O’Connell, the chief executive of the TaxPayers’ Alliance, said: “Taxpayers will be rightly nervous about the growing tentacles of the taxman, particularly given the authoritarian nature of this new power.
“HMRC has become an increasingly kafkaesque institution, only compounding the misery of taxpayers who have to deal with the calamitous mess that is our tax system.”
A spokesman for HMRC said: “It’s right that we seek to recover tax from the tiny minority of customers who have the funds to pay but refuse to do so. This measure will be subject to robust safeguards and we’ll continue to support customers who need help with their payments.”
Sir David Davis, a former Conservative Cabinet minister, said changes were unjustified. “It’s not being done to make it easier for taxpayers. It’s being done to make it easier for tax collectors,” he said.
“The simple truth is HMRC makes mistakes, and allowing them to step in and arbitrarily take your savings in circumstances where they may well have made a miscalculation is completely unjust and improper.
“The state has, over the last few decades, taken more and more liberties with our privacy and with our data and in general, it hasn’t improved services, it hasn’t improved security, but what it has done is undermine the integrity of people’s lives.”
Mike Warburton, former tax director at Grant Thornton, said: “I have no problem with HMRC developing and expanding their systems to collect information that they need to assess the tax that we owe. What I would be concerned about is the expansion of this into a ‘ Big Brother ’ scenario where the Government collects information of a wider nature which they can then use to control us.”
John O’Connell, chief executive of the TaxPayers’ Alliance, also criticised the approach. He said: “HMRC has become increasingly Kafkaesque in its dealings with the public, particularly high earners with complicated tax affairs. The taxman needs to ensure that any changes result in a more open, transparent and receptive body than is the case now.”