Oct 2014
16
HMRC Awarded new powers to deduct tax from pay packets come 2015
HMRC will be able to deduct up to £17,000 a year from high earners salaries to recover tax debts under new rules that came into affect recently. From April 2015 tax codes will be issued to recover money from those believed to have underpaid income tax, capital gains or National Insurance contributions.
Deductions of £17,000 would only affect those earning over £90,000 and HMRC confirmed it would not deduct more than half the salary of those liable, and it does not affect those earning less than £30,000. HMRC is required to send a letter to the taxpayer explaining their intention to withdraw debts from the taxpayer’s salary, but a taxpayer cannot prevent this from happening unless they make other arrangements to pay. Letters are expected to be issued from January next year.
A spokesperson from HMRC said: “Taxpayers welcome the option to have tax debt collected by instalment. This is a very longstanding feature of the payroll system but the increase n the current threshold will allow more tax debts to be aid in this way.”
The changes are expected to raise £115m in the 2015-16 tax year.
