Failure to recognise Scots law another HMRC blunder
But some Scottish experts are not aware a consultation issued by HMRC in June, proposing that the government department be able to seize money direct from the bank accounts of persistent non-payers for due tax payments, does not apply north of the Border.
Following recommendations made by the House of Commons public accounts committee (PAC), HMRC has suggested its powers be extended so that it no longer requires a court order to freeze and seize money in people's bank accounts in "extreme circumstances". It did not go into the mechanics of how it would obtain bank account details for these individuals.
A spokesman for HMRC has told The Scotsman these proposals would not affect Scotland and the existing system would be maintained, where it would have to apply to the Sheriff Court for a summary warrant.
Scottish accountants were alarmed at the suggestions HMRC should have its powers extended, especially in the aftermath of its recent blunder which left 25 million people at risk from potential fraud. Accountants added that it was not made clear in the consultation document that Scotland would not be affected.
Bruce Wilson, head of tax consulting at Campbell Dallas, said: "I know the 25 million people this week who made the headlines have been affected by the actions of an individual, but we have clients with small businesses who repeatedly receive incorrect demands for payment from HMRC and it's always the computer that gets the blame.
"I feel HMRC systems are not robust enough and asking for this additional power is Draconian and just a step too far.
"The consultation document is quite confusing and it should have been stated more clearly that proposals don't apply to Scotland."
There is also a fear that, if these proposals are introduced in other parts of the UK, they could eventually be extended north of the Border.
Derek Allen, director of taxation at the Institute of Chartered Accountants of Scotland (ICAS ), said: "This proposal for the HMRC to extend its powers in this way was only one item to be considered as part of a large consultation and there has been strong reaction against it. It would require a separate consultation in Scotland if it were to be introduced here. But if there was a change in legislation in England and Wales it would make sense to apply the same in Scotland. I don't have the confidence in HMRC's ability to get things right all of the time and the chance it might erroneously take money from someone's bank account is unacceptable. Its systems are not sufficiently robust."
This issue also focuses attention on the fact that some professionals in Scotland believe HMRC does not fully understand the differences in the country's legal systems.
James Aitken, senior associate with HBJ Gateley Wareing and a member of the Law Society of Scotland's tax law committee, said he has come across this situation several times, for example when discussing stamp duty land tax (SDLT) and possible changes to capital gains tax (CGT) with HMRC.
Aitken said: "When SDLT was introduced in Scotland, it only worked because the Scottish legal profession made it work. And only last week when I was discussing CGT with HMRC, some people didn't seem to know about the differences in partnership law in Scotland.
"I just feel that HMRC and the Treasury are becoming less and less knowledgeable about Scotland."