HM Revenue & Customs (HMRC) has been granted the authority to directly access individuals’ bank accounts to recover unpaid taxes. Debtors who owe more than £1,000 to HMRC may have funds withdrawn from their accounts by their bank or building society, including cash ISAs.
The Direct Recovery of Debts (DRD) scheme, initiated in 2015 and paused during the Covid pandemic, has been reinstated by HMRC following approval from Chancellor Rachel Reeves in the Spring Statement of March 2025. The scheme targets individuals who have the means to pay their taxes but have persistently neglected to do so, primarily affecting those who file self-assessment tax returns, such as self-employed individuals or those with substantial income from investments, properties, or savings.
Prior to any deductions, HMRC agents will visit taxpayers to confirm their identity, verify the debt, and discuss repayment options. The new regulations stipulate that individuals must retain at least £5,000 in their accounts for essential expenses, and a 30-day appeal period is provided before funds can be withdrawn. Vulnerable individuals are exempt from this enforcement.
Despite criticism from some tax experts, who describe the measure as draconian, HMRC emphasizes the necessity of pursuing tax payment from those capable of doing so. The government aims to recoup £11 billion in outstanding debts by 2030, with HMRC receiving a £630 million investment to enhance debt recovery operations, including the recruitment of 2,400 debt management personnel.
An HMRC spokesperson affirmed the importance of holding accountable the minority who evade tax payments, noting that stringent safeguards are in place to support individuals requiring assistance with their tax obligations.