Taxes to rise unless HMRC given powers to raid accounts of tax evaders

Prime Minister David Cameron has warned that the government would have to hike taxes unless HM Revenue & Customs (HMRC) is provided with new powers to raid bank accounts of tax evaders.

The Tory-led Coalition has proposed to equip HMRC with powers to withdraw cash from bank accounts of those who owe the taxman money without seeking their permission. The tax department will also be allowed to withdraw money from joint accounts, even when one of the holders of the joint account owes nothing to the taxman.

But an influential group of MPs has warned that taxpayers could suffer a serious detriment in case in case tax collectors withdraw money from their back accounts without their permission.

Criticizing the proposal, Treasury Select Committee Chairman Andrew Tyrie said that it was "very concerning" because HMRC does not always ask for the right amount. He added that some people may find their money taken from their bank accounts that later should be paid back, which would just be unacceptable.

But, Mr. Cameron insisted that it was crucial to equip HMRC with such powers to make people pay the taxes they were meant to pay.

Stressing on the need for new powers for MRC, Mr. Cameron said, "If we don't collect taxes properly and [don't] make sure people pay their taxes properly we look at the problems of having to raise tax rates. I don't want to do that, so I support the changes the Chancellor set out in the Budget."

He also pointed out several safeguards that would accompany the controversial measure. He noted that the measure would be applied only to those who would owe more than £1,000 to the Treasury, and that tax collectors would have to ensure that at least £5,000 remains in the account they raid.