Tax authority has been given the green light to deduct money from accounts
15:43, 27 Sep 2025Updated 15:44, 27 Sep 2025
HMRC has tougher powers to punish tax dodgers.
HMRC has been granted powers to take money from bank accounts which have more than £5,000 in them.
It’s part of a fightback against people who refuse to pay their taxes.
The tax authority will have to ensure at least £5,000 is left in bank accounts so people have money to afford essentials.
READ MORE: HMRC to deduct £300 directly from bank accounts of state pensioners
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They have also vowed not to target “vulnerable” people.
It’s known as Direct Recovery of Debts or DRD, where HMRC is allowed to recover cash directly from accounts in certain circumstances.
It was first launched in 2015 but paused during the Covid pandemic.
Chancellor Rachel Reeves has now given the green light for it to start up again.
While officials can take cash from accounts, they will usually pay a visit to affected households first.
Most likely to be affected are self-employed people or those who receive significant income from investments, second properties or savings interest.
“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.”
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.”