The HMRC has come under fire from the public and politicians over the government granting the taxman powers to directly siphon cash from Britons' bank accounts without a court order.
While the HMRC told IBTimes UK that claims of raiding any ordinary's citizen's banks accounts was "disproportionate and absurd," the proposed law is squarely aimed at "hardcore defaulters" and not the average person.
Under the proposed laws, the HMRC revealed in a consultation document that the process of "direct recovery" would allow it take money straight out of joint accounts if the holder had failed to act on four formal warnings requiring payment.
It said that if the new law came into force, it would immediately target 17,000 accounts.
People who owe tax authorities £1,000 (€1,223, $1,690) or more could see that money seized directly from their bank accounts. However, this could only happen provided there was £5,000 left in their accounts afterwards.
But even so, fear is growing that the HMRC will having seeming unstoppable power in claiming cash that may not even be due as it has already admitted that it has "made mistakes in the past."
"We hope that this power will be exercised reasonably, especially given the proposed safeguards," said Ronnie Ludwig, Partner in the private wealth group at Saffery Champness.
"But I am uneasy with the underlying principle. There is a marked lack of external oversight in the proposals. HMRC is effectively judge and jury, however diligently they go about it."
"HMRC should not be able to raid people's bank accounts without gaining the permission of the courts first. Recently HMRC has also gained the power to demand tax in dispute upfront, before appeals or court hearings have taken place. We seem to be witnessing a creeping extension of executive government power. "
'Soul Destroying' Battles with HMRC
The taxman has already admitted to charging more than five million people wrongly through the Pay as You Earn (PAYE) system due to them being allocated the wrong tax code.
In 2007, the HMRC also lost physical discs that contained personal data and bank details of 25 million families claiming child benefit.
However, when it comes to the new proposed law, a HMRC spokesperson told IBTimes UK: "Most people pay their taxes on time, but a minority do not, and some refuse to engage with us at all. It is wrong that this should hand an advantage to those who simply dodge their obligations, and is unfair on the vast majority who pay their taxes in full and on time.
"We are consulting on a new measure with appropriate safeguards to help level the playing field, and tackle those who have the means to pay but are choosing not to. These are people who have, on average, over £20,000 in their accounts, but are refusing to pay their debts.
"This will only affect a tiny number of debtors, whom we have contacted a minimum of four times to ask for payment."
However, this has done nothing to abate the public outcry over the new proposed laws.
Speaking to IBTimes UK, Rae W, 35, who works at a London investment bank revealed her mental and monetary anguish over the HMRC allegedly demanding tax payments that were incorrect.
"The HMRC have a history of making errors and not understanding basic concepts such as temping," said Rae.
"About 4 years after a period of temping assignments, I was sent a letter claiming I owed them around £10,000. After several painful phone calls later, we managed to establish that this was because they thought I was working 3 jobs at the same time in one tax year, when I was simply temping and changing roles regularly.
"My tax code changed regularly throughout this process, which took about 6 months to resolve. I was forced to hire an accountant (at my own expense) as it was so painfully time-consuming and soul-destroying trying to communicate with people who didn't seem to understand basic employment concepts, and each time I called I had to deal with someone new and explain the whole situation over again, as email was not a format they used."
Meanwhile, another member of the public, Laurie C, in his 30s, half-jokingly told IBTimes UK that he's "going to leave the country" after the news of the proposed law.
"Despite being on the PAYE system for two jobs, highlights over the recent year include being rebated £3,000, then asked for £11,000, then being rebated. I hate them."
Indeed, various experts have also voiced concerns over the inaccuracy of payment demands.
"There is particular concern about HMRC's ability to access a joint account, when the other account-holder may not owe any tax, but may have contributed all the funds to the account," said Phil Berwick, partner and Head of Contentious Tax at law firm Irwin Mitchell.
"HMRC have powers to chase the debts, but want an easy option. All taxpayers should be concerned by these potential new powers. HMRC are not immune from making mistakes, and the potential for raiding an innocent taxpayer's bank account, with disastrous consequences, cannot be overlooked. In such circumstances, how easy will it be for them to get their money refunded, and how quickly."
Don't Fight the Fed
One of the biggest points that supporters of the law are making is that other countries, such as the US, France, and Germany, have this type of law in place.
However, Gwen C, a US expat in London, says her dealings with the HMRC's counterpart in America – the Internal Revenue Service – has been exasperating.
"The IRS already does this in the US, and it's such a massive institution that no one really fights their decision," said Gwen.
"The idea of it happening here really irritates me. We've been wrongly charged, more than a grand out of one pay cheque twice, and we have seen nothing back from that.
"They counted an umbrella company as a second company and got confused."
So is the Proposed Law a Good Thing?
HMRC has made it very clear that it intends to use the new law to safeguard the ordinary taxpayer from footing the bill of major defaulters.
However, the key worry lies in accuracy of tax demands. A parliamentary committee warned that granting the HMRC such power is "very concerning" due to the taxman's history of mistakes.
"The ability directly to have access to millions of taxpayers' bank accounts raises concerns about the risk of fraud and error," said politicians in a report.
"This policy is highly dependent on HMRC's ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers."
Furthermore, experts say that more needs to be done to safeguard the public, if the law does go ahead.
"The consultation does not properly address a scenario under which a person or company goes bankrupt. If HMRC can recover money without going to court but others must, this could put the Revenue in position where it is effectively preferred creditor, a status which it lost in 2003," said Ludwig.