As recommended by the Northern Ireland Tax Committee in its response to the above consultation, additional safeguards are to be built into the proposed direct recovery of debts (DRD) legislation. The announcement came as the Government published its response to the consultation.

In addition, in order to allow for an extended period of scrutiny, the Government intends to legislate in a Finance Bill in 2015, during the next Parliament. Draft legislation will be published and consulted on in due course. This suggests that the legislation will not take effect from 6 April 2015 as originally planned.

The additional safeguards will include:

• guaranteed visits to debtors from an HMRC officer to meet them face-to-face;
• establishing a new, specialist unit to deal with cases involving vulnerable members of society, as well as providing a dedicated DRD team and helpline;
• ensuring that judicial oversight of the process is enshrined in legislation, by allowing for appeal to the County Court;
• putting a hold on debtors’ accounts and giving them 30 days – more than twice as long as previously planned – to contact HMRC and arrange payment of the debt or object to the use of DRD, before any money is taken; and
• further new safeguards relating to transparency, governance and a phased implementation of the DRD powers.

Many of the additional safeguards announced were specific recommendations of the Committee. Furthermore, the Government has decided not to implement the requirement for banks to provide 12 months of data on a debtor’s account history; this was a specific concern outlined by the Committee in its consultation submission.

An overriding concern was also the possible financial and reputational damage that could ensue from the incorrect use of DRD. The Government has specifically responded to this announcing that if HMRC is found to have made a mistake in its administration of DRD, it will consider paying financial redress in line with its existing policies for dealing with complaints.

The Northern Ireland Tax Committee will continue to engage with the Government as it consults further in this area.