HMRC has confirmed it is directly taking money out of bank accounts with more than £5,000 to recover unpaid debts. The tax office has resumed powers suspended during the pandemic, allowing it to directly access people’s bank accounts to recover unpaid tax.
Policy restarted in 'test and learn' phase
HMRC says it restarted the powers in a ‘test and learn’ phase in 2025. The policy gives HMRC the power to take money owed ‘directly’ from a current account or from a Cash ISA, if the debt is larger than £1,000.
HMRC said: “The Government announced in the Spring Statement 2025 that HMRC would restart the use of DRD for individuals and businesses who choose not to pay the tax they owe. HMRC paused the use of DRD during the COVID-19 pandemic and has now restarted in a ‘test and learn’ phase.
Safeguards and protections
“This policy allows HMRC to recover money owed by requiring banks and building societies to pay directly from a debtor’s account, and/or funds held in Cash Individual Savings Accounts (ISAs). It can be used where debtors owe £1,000 or more, subject to safeguards.”
The safeguards state that HMRC should not cause those with debts ‘undue hardship’ by taking the money back out of accounts, which includes only taking money from accounts which have more than £5,000. HMRC says: “This includes… always leaving a minimum of £5,000 in the debtor’s accounts, so that we do not put a hold on money needed to pay wages, mortgages or essential business or household expenses.”
Appeals and support
HMRC also stresses that every debtor will receive a face-to-face visit from the taxman before direct recovery is used. Debtors will also be able to lodge an appeal to HMRC within 30 days, and no funds will be transferred until those 30 days have passed.
It continues: “Some people experience genuine financial difficulty paying their tax. This often happens when their life is affected by a major personal event, or their business develops a problem. HMRC routinely takes a sympathetic approach to those who need additional support.
“When people realise they are not going to be able to pay on time, or if they require additional assistance with their taxes, they should get in touch as soon as possible.
“To make sure vulnerable customers are fully supported during the use of DRD: a debtor that meets the strict criteria for DRD but is considered vulnerable, or in need of extra support will be taken out of DRD and offered help through the extra support team. HMRC worked with voluntary organisations and professional bodies on their communications to debtors affected by DRD, to ensure they provide helpful advice on how to seek further assistance.”
