New powers are being considered to allow HMRC officials to request details from banks in a crackdown on DWP benefit fraud after Parliament discussions on new laws
A senior anti-fraud official at HMRC has explained why they regularly request large amounts of data about UK bank accounts. The issue came out during a discussion in Parliament about new laws that would allow investigators to order banks cough to provide details of accounts linked to DWP benefits, to help identify any fraudulent claims or other wrongful payments.
HMRC itself already has powers to demand banking details under the Finance Act 2011, to make sure taxes are paid correctly. Richard Las, the chief investigation officer and director of the Fraud Investigation Service at HMRC, explained how the system works when asked by MPs looking at the new bill.
DWP minister Andrew Western was under the impression they were getting information about “every interest-bearing bank account in the country”. Mr Las said in reply that they do “bulk data gathering”, explaining: “I guess it is not just the banks, but we do get the information on interest-bearing accounts. It is an annual exercise, not a real-time exercise.”
He set out the reason for the mass data exercise, pointing out: “It is clearly timed in such a way that it helps us understand whether the right amount of tax has been paid on interest that has been accrued. We are talking about large accounts because in most cases people’s interest is quite small, but there will be some people who get a lot of it.
“We have a huge amount of controls over how we manage that information and how we use it and protect it; they are our normal requirements as with any other taxpayer data.” Mr Las also revealed that they obtain data from third parties: “We have information from merchant acquirers on transactions that businesses might make, for example.
“We also have information that we get from online platforms in terms of sales and things like that. It is all part of bringing that information together.” Despite the extensive data powers, he assured that HMRC is committed to confidentiality and manages the data responsibly.
However, when asked about independent oversight of these measures, he said he wasn’t sure if there was any, stating he would need to go and check. The forthcoming legislation would grant investigators the power to directly withdraw funds from individuals’ bank accounts to settle debts, mirroring existing HMRC powers.
The new regulations require officials to request at least three months of bank statements before directly extracting funds, ensuring the individual has adequate resources to cover the cost. In cases where recovery is difficult, officials will also have the power to approach the courts to apply for asset confiscation from the debtor.
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Cabinet under secretary Georgina Gould detailed the situations in which these additional powers could be invoked. She said: “While the bill will provide the powers to seek recovery directly through bank accounts and PAYE earnings, these might not always be the most appropriate or effective recovery route.
“For instance, the liable person might hold significant other property assets or keep assets or money abroad. In those cases, it would be unfair for us not to seek recovery.
“We therefore wish to work through established legal procedures to ensure that we can seek to pursue recovery through the most appropriate and effective mechanisms-for example, liability orders.”