Rachel Reeves is considering changes that would grant HMRC greater powers to deduct unpaid tax on savings interest. The initiative stems from Treasury concerns that many savers are not paying the taxes they owe on interest earned.
Consultation documents released after the Spring Statement indicate that HMRC seeks enhanced powers to obtain detailed personal information from banks, including National Insurance numbers, to match taxpayers with their savings accounts more accurately. The consultation highlights the need for improved data quality to streamline tax payments and ensure accurate collection for public services.
Currently, banks provide HMRC with customer information for savings tax purposes, but data inconsistencies hinder effective tax collection. The proposed changes aim to rectify this, allowing HMRC to adjust PAYE tax codes to collect owed taxes more efficiently.
The proposed system would allow HMRC to issue tax assessments up to four years later or longer in cases of negligence or evasion.
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