Government launches consultation package on HMRC powers and tax administration

One of the most controversial proposals would allow HMRC to recover low-value tax debts directly from taxpayers' bank accounts by deducting instalments, rather than requiring payment in full or court action. The government says the measure is intended to improve debt collection while providing safeguards for vulnerable taxpayers. The consultation package also includes further details of the planned registration regime for tax advisers, which will require agents dealing with HMRC to register formally. HMRC would have powers to refuse or suspend registration where there are concerns about an agent's conduct, as part of wider reforms aimed at improving standards in the tax advice market.

Alongside these measures are proposals to expand digital services and modernise the administration of the tax system. The government is seeking views on how technology can reduce administrative burdens while improving compliance and making it easier for taxpayers to interact with HMRC.

The consultations do not introduce immediate changes, but they provide a clear indication of the government's direction of travel. Businesses, advisers and representative bodies now have an opportunity to comment before legislation is drafted. Some of the proposals, particularly HMRC's ability to recover tax debts directly from bank accounts and the new regulatory framework for tax advisers, are likely to generate considerable debate. Businesses and advisers should consider responding to the consultations where the proposals could affect them.