The National small business organisation the Forum of Private Business is lobbying the government to scrap or change plans that aim to provide new powers to Her Majesty’s Revenue and Customs (HMRC) to recovery outstanding tax debts directly from the bank accounts of small businesses.

The proposals where announced in the 2014 Budget in March and are targeted at enabling tax inspectors to directly take funds from the accounts of small businesses and the self-employed in cases where it’s deemed they've got enough funds to pay the outstanding debt.

The Forum of Private Business is arguing that the new measures target smaller businesses disproportionately and don’t take into account the unexpected financial burdens small businesses face and which fall outside the £5,000 safety net outlined in the government plans.

The Head of Policy, Alexander Jackman at the Forum of Private Business said: Small firms are only just recovering from the increased regulatory burden of Real Time Information on their accounts and this is only set to increase with the introduction of pensions auto enrolment. As a result this makes them extremely wary of any plans to give additional powers to the taxman.

“The sheer variances of cash flow in different types of businesses and the limited resources available to effectively implement these proposals are also a real concern. These proposals, if introduced, could leave many of our members feeling that they are being unfairly targeted and government should seriously reconsider.”

This is especially the case in the building industry where small traders regularly have to meet staffing costs and material costs in order to bring in the required future revenues to keep a business going.