HMRC HAS REVIVED powers allowing it to take money directly from taxpayers’ bank accounts to settle unpaid tax debts. These so-called “direct recovery” powers apply to debts over £1,000, though HMRC must leave at least £5,000 across your accounts after any deduction.
While HMRC insists this is targeted only at “persistent non-payers”, the move is a serious escalation in debt collection and risks catching out individuals and businesses who may not realise they have an outstanding liability.
In today’s Shipleys Tax brief, we summarise how it works, the safeguards in place, and what you should do to protect yourself.
HMRC has revived powers allowing it to take money directly from taxpayers’ bank accounts to settle unpaid tax debts
What’s Happening?
HMRC has re-started use of its Direct Recovery of Debts (DRD) powers, allowing it to take money directly from taxpayers’ bank accounts where tax bills remain unpaid.
According to HMRC’s own briefing, updated 22 September 2025, DRD is again being used after being paused during the pandemic (HMRC – Issue Briefing: Direct Recovery of Debts).
These powers apply to debts of £1,000 or more, but HMRC must leave at least £5,000 across your accounts after any deduction. The rules are set out in HMRC’s policy paper on DRD (HMRC policy paper).
Why Now?
The scheme was first legislated previously but paused during Covid. HMRC has now confirmed DRD is being reintroduced on a “test and learn” basis to help tackle rising levels of unpaid tax.
Professional advisers have warned that while the target is “persistent non-payers”, errors, disputed liabilities, or overlooked correspondence could mean ordinary taxpayers are at risk if they don’t engage early with HMRC.
These powers apply to debts of £1,000 or more, but HMRC must leave at least £5,000 across your accounts after any deduction
What Does This Mean for You?
- All taxpayers are potentially affected — individuals, landlords, and businesses.
- Outstanding debts as low as £1,000 can trigger DRD action.
- Safeguards exist (such as notice, objections and appeals), but the process relies on HMRC’s accuracy.
For clients, this means you should:
- Review your HMRC correspondence and ensure no liabilities are outstanding.
- Deal with disputes early before HMRC escalates collection.
- Get professional advice if you receive a DRD notice.
How Shipleys Tax Can Help
At Shipleys Tax, we specialise in defending clients against HMRC enforcement action. We can:
- Negotiate affordable payment arrangements before HMRC acts.
- Challenge incorrect or disputed demands.
- Protect your cashflow and ensure safeguards are applied properly.
Conclusion
Don’t wait until HMRC knocks on your door (or bank account). If you have unresolved tax issues — even relatively small debts — now is the time to act.
Book a confidential consultation with Shipleys Tax today to safeguard your finances and gain peace of mind against any HMRC enforcement action.
HMRC Direct Recovery of Debts – Frequently Asked Questions
Can HMRC really take money directly from my bank account?
Yes. Under its Direct Recovery of Debts (DRD) powers, HMRC can instruct banks and building societies to transfer unpaid tax directly from your accounts. This power was re-started in September 2025 after being paused during the pandemic.
How much must HMRC leave in my account?
HMRC must leave you with at least £5,000 across all accounts after any deduction. The powers only apply where the debt owed is £1,000 or more.
Will HMRC warn me before taking money?
Yes. HMRC must give you advance notice and an opportunity to object or appeal before any funds are recovered. They will also assess whether you are “vulnerable” and require additional support.
What if I dispute the debt?
If you disagree with HMRC’s figures or the debt is under appeal, you can challenge the action. Professional advice is strongly recommended — errors and disputes can and do occur.
Who is most at risk?
Anyone with unresolved HMRC liabilities could be affected — individuals, landlords, self-employed workers, and businesses. While HMRC says DRD targets “persistent non-payers”, the safest approach is to resolve outstanding matters early.
For further assistance or queries, please contact:
Sheffield: 0114 303 7076 Leeds: 0113 320 9284
Email: info@shipleystax.com
Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.
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