Finance Bill

Further written evidence submitted by Association of Taxation Technicians (FB 83)

1. Introduction

1.1. The ATT offers the following comments on the proposals to enable HMRC to collect debts direct from the accounts of debtors. We refer to these as the Direct Recovery of Debt (DRD) proposals.

1.2. We have been impressed by HMRC’s open engagement with professional bodies in an effort to build in appropriate safeguards in order to ensure that the DRD provisions are only used in relation to debtors who fall into the category of "Can pay; won’t pay". Following discussions between HMRC and professional bodies (including this Association), Government Amendments 11 and 12 are being introduced to provide essential protection for vulnerable individuals. We very much welcome this initiative although as noted below we have some ongoing concern with the detailed wording.

1.3. We have had the benefit of seeing representations in respect of the DRD proposals made by both the Chartered Institute of Taxation (CIOT) and the Low income Tax Reform Group (LITRG). We fully support those representations. We highlight three particular concerns.


2.1. Following consultation, the Government guaranteed a face-to-face visit for every debtor who is considered for DRD1. That assurance is somewhat weakly provided in paragraph 2(4) of Schedule 8. This requires HMRC to be satisfied that the debtor (referred to as P in the schedule and this note) is aware that the debt is due and payable. We recognise the difficulty in providing a legislative commitment that would be appropriate in all cases so rather than suggesting one, we recommend that assurance is sought from the Government during debate on this clause that paragraph 2(4) is indeed intended to oblige HMRC to have appropriate direct contact with P before invoking the provisions.

2.2. We refer in 1.2 above to the proposed Government Amendments. To afford adequate protection to vulnerable individuals (persons with a particular disadvantage in relation to their tax affairs), we think it is essential that proof of such particular disadvantage (whether in the case of P or a third party) should itself be a ground both for objecting to the imposition of DRD and appealing to the County Court. It is not clear whether the proposed amendment will provide for this.

2.3. Our ongoing concern is that the proposed paragraph 4A (1) (inserted by Amendment 12) only requires HMRC to "consider whether or not, to the best of HMRC’s knowledge, there are matters as a result of which the person is, or may be, at a particular disadvantage in dealing with the person’s Revenue and Customs affairs". From discussions with HMRC, we had anticipated that the obligation upon HMRC would be an active as distinct from a passive one. We think that HMRC should be required to be satisfied that P is not vulnerable before instituting DRD. Having no knowledge of a person’s possible particular disadvantage (the proposed wording) is not the same as considering whether they have any such disadvantage. The guaranteed face-to-face meeting (see 2.1 above) should assist HMRC in that obligation.

1. Foreword to HMRC’s Direct recovery of debts Summary of Responses, November 2014 – see

2.4. We are concerned that the grounds for objection or appeal by someone other than P are excessively restrictive. In particular, we question why such a person should be required to demonstrate that they would suffer exceptional hardship (paragraph 9(3)(c). There is some lack of clarity whether a joint account holder (other than P) would have to rely on the restrictive paragraph 9(3)(c) or whether they could object or appeal under the less restrictive paragraph 9(3)(d). Clarification during debate would be helpful on this point.

October 2015


The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax

administration and practice. One of our key aims is to provide an appropriate qualification for

individuals who undertake tax compliance work. Drawing on our members' practical experience and

knowledge, we contribute to consultations on the development of the UK tax system and seek to

ensure that, for the general public, it is workable and as fair as possible.

Our members are qualified by examination and practical experience. They commit to the highest

standards of professional conduct and ensure that their tax knowledge is constantly kept up to date.

Members may be found in private practice, commerce and industry, government and academia.

The Association has over 7,700 members and Fellows together with over 5,600 students. Members

and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the

designatory letters 'ATT' and 'ATT (Fellow)' respectively.

Prepared 16th October 2015