Hidden away in the 2014/15 Budget, George Osborne announced he would “modernise and strengthen HMRC’s Debt collection powers”. It sounds great, until you delve into the detail and discover that this legislation will allow HMRC to take cash directly from a taxpayer’s bank account.

The standard process will involve communicating with the taxpayer on at least 4 occasions to remind them how much tax is due. If the amount owing is £1,000 or more in tax or tax credits, HMRC will be able to take the cash without the taxpayer’s approval. HMRC have pledged that no cash will be taken if it would leave less than £5,000 in the taxpayer’s bank account. As an added safeguard, the amount to be taken will be frozen in the account for 14 days to give the taxpayers the opportunity to pay before the money is seized.

The plans are currently in the consultation process, but if approved they will take effect in April 2015.