The UK’s tax authority, HMRC, is relaunching its Direct Recovery of Debts (DRD) program, which compels banks to transfer funds from the accounts of individuals with tax debts of at least £1,000. Under the scheme, taxpayers are guaranteed a minimum balance of £5,000 to cover essential living costs, but any amount above this can be seized after a 30-day appeal period has concluded.
According to a report by Jadeh Makhsous news base, the program, which was first introduced in 2015 and paused during the pandemic, has now been restarted in a “test and learn” phase. This follows Chancellor Rachel Reeves granting HMRC the authority to do so in her March 2025 Spring Statement.
Officials have stated that the crackdown will primarily target individuals who have the means to pay their taxes but refuse to do so. The focus will be on self-assessment taxpayers, including the self-employed, landlords, and those with significant investment income. As a procedural step, HMRC staff will visit debtors in person before any funds are taken from their accounts.
The measure has drawn criticism, with some branding the powers as “draconian.” Dawn Register, a tax dispute resolution partner at BDO, commented: “Given the pressure on public finances, it’s clear HMRC is determined to get tougher on those who can pay but don’t pay. 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 a report by Jadeh Makhsous, this initiative comes as HMRC confronts a significant amount of unpaid liabilities, currently totaling £42.8 billion, a figure much higher than pre-pandemic levels. The government aims to recover an additional £11 billion by 2030 and has invested £630 million in debt recovery efforts, which includes hiring 2,400 new enforcement staff.
While the Treasury insists that safeguards are in place to prevent overreach, campaigners have expressed concerns that the policy could severely impact taxpayers at a time when many household finances are already under considerable strain. What is your opinion on this measure? Share your thoughts in the comments.