HM Revenue & Customs will be able to take money from people’s accounts in a move called ‘draconian’ by tax experts, with anyone owing over £1,000 at risk of their bank paying the taxman directly

The taxman has had powers restored to reach directly into people’s bank accounts and reclaim money from those who haven’t paid their taxes.

HM Revenue & Customs (HMRC) will be able to take money directly from the accounts in a move called “draconian” by tax experts.

Debtors owing more than £1,000 to HMRC could now see their bank or building society paying the taxman directly from their accounts, including cash ISAs.

The scheme, called Direct Recovery of Debts or DRD, was launched in 2015 but officials put it on hold during the Covid pandemic.

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Now HMRC has officially relaunched the scheme, after Chancellor Rachel Reeves signed off on granting the new powers in the Spring Statement in March 2025.

The aim of the scheme is to target those who can afford to pay their tax bills, but have repeatedly refused to do so, officials said.

Most of those affected will be people who file a self-assessment tax return, for example self-employed people or those who receive significant income from investments, second properties or savings interest.

Before any money is taken out of their bank accounts taxpayers can expect to receive a visit from HMRC agents who will identify the taxpayer, make sure it is their debt and discuss options for repayment before taking action.

The new rules say people must be left with at least £5,000 in their account to enable them to cover essentials and HMRC have to allow 30 days for the person to appeal before they can take money directly out of someone’s account.

Meanwhile people who are identified as ‘vulnerable’ won’t be targeted under the scheme, HMRC has said. However the new powers have been blasted by some tax experts.

“Given the pressure on public finances, it’s clear that HMRC is determined to get tougher on those who can pay but don’t pay,” Dawn Register, a tax dispute resolution partner at advisory firm BDO told This is Money.

“The relaunch of this draconian power underlines how important it is not to stick your head in the sand and ignore HMRC demands.”

According to government figures HMRC is owed £42.8billion in unpaid taxes, a figure that is significantly higher since the pandemic. The government have said they plan to collect £11billion more in owed debt by the end of 2030.

The treasury has invested £630million to improve HMRC’s ability to recover debt, which includes hiring 2,400 new debt management personnel.

An HMRC spokesperson said: “Most people pay tax on time and in full – but it’s right that we seek to recover tax from the tiny minority who have the funds to pay but refuse to.

“These powers are subject to robust safeguards and we’ll continue to support customers who need help with their payments.”



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