Taxman gets new power to trace debtors
New powers forcing organisations and individuals to tell Revenue &
Customs the whereabouts of suspected tax dodgers are incoming for the tax authority.
Until now, it was up to mobile phone companies, councils and utility providers to volunteer the address of a person if HMRC requested it to collect their tax debt.
But under the Finance Bill, which is due to become law in a few weeks, third parties face a hefty cash penalty if they refuse to aid HMRC in locating the taxpayer.
The Revenue says the new power is needed because while most third parties accept its informal requests for addresses, some feel constrained by data protection laws.
Friends, neighbours and relatives of the targeted taxpayer are exempt, as are state departments, charities and those who have “not had a business relationship” with them.
In their notes , tax officials also stressed that the power would be used “proportionately;” after other avenues of locating the taxpayer had been considered, and when it was the most cost effective option.
If the third party – a local council, a company or an association, does not have any later address than the one HMRC has, they can say as much without the risk of a penalty.
The third party can also claim that the request to unearth a customer address is “unduly onerous,” in which case they must appeal within 30 days of HMRC’s notice being issued.
However, failure to respond or provide the information, which the taxman must ‘reasonably’ suspect is held by the third party, will expose the recipient to a penalty of £300.
Advisors to small firms and partnerships, which are likely to feel the full force of the powers from next month, say HMRC wants to collect money more effectively, as tax receipts have fallen since the downturn began.
Jun 29, 2009
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