HM Revenue & Customs wants to have secret access to taxpayers' bank accounts and is proposing to persuade the British Government to introduce a range of new measures to crack down on tax evasion. Some see this as an unreasonable invasion of taxpayers' privacy.

The proposal, released on 10th July in a policy document entitled "Amending HMRC's Civil Information Powers," suggests that HMRC should be allowed to have secret access to taxpayers' banking information to ascertain whether the correct amount of tax has been paid, focusing on income tax, capital gains tax, value-added tax and (where applicable) corporation tax. At the moment, by means of information orders, HMRC can only access taxpayers' financial information with their consent, unless a tribunal orders otherwise. At present, financial institutions must notify customers whenever HMRC has requested access to their financial information, but HMRC wants to deny taxpayers prior notice and believes that the tribunal process in this case is not a good use of Government resources.

I am concerned about the erosion of taxpayers' civil liberties that this proposal prefigures. Although HMRC is correct to crack down on tax evasion, which costs the UK extensively each year, it is overreaching itself here. The thought of allowing HMRC to have secret access to financial information is an alarming one. HMRC has stated that it believes that it will only use these powers for a few hundred cases per year and the reform should not, therefore, cause much concern. However, if these cases are so few and far between, its argument that the current process is too wasteful of resources seems facile. In seeking to access bank account information in secret, HMRC appears to be extending its powers in an intrusive and troubling manner. The Government department is accepting comments on the proposal until 2nd October.

* David Redfern can be reached on 0115 795 0232