Reeves mulls fresh tax raid on savers to balance books

Rachel Reeves is looking at imposing a fresh tax raid on savers by giving HMRC new powers to dock workers’ pay and acquire data about customers from banks.

- MILLIE COOKE

It comes as part of a wider drive to ensure people pay the tax they owe amid concern that savers are failing to pay the correct tax on interest earned, as the Treasury seeks extra income without directly hiking taxes.

At the spring statement, the chancellor vowed to increase the number of tax fraudsters charged every year by 20 per cent, promising to invest in HMRC’s “capacity to crack down on tax avoidance”.

Consultation documents published in the wake of the spring statement indicated that proposals being considered by the government include plans to allow banks to hand over more personal information about their savers, including national insurance numbers, that would make it easier for HMRC to match taxpayers with the money in their savings accounts.

While banks and building societies are responsible for passing information about customers who need to pay tax on their savings to HMRC, the data is often incompatible with current systems. Data for as many as one in five accounts is unreadable, the Treasury said.