HMRC to expand powers to deduct tax debts directly from bank accounts

HM Revenue and Customs (HMRC) is set to expand its Direct Recovery of Debts (DRD) powers, allowing the agency to deduct money directly from the current and savings accounts of taxpayers who owe money. This move, expected to be detailed in the upcoming Autumn Budget, aims to address Britain’s significant tax debt.

Currently, HMRC can recover debts exceeding £1,000, provided the taxpayer retains at least £5,000 after the deduction. However, new measures may slash this threshold significantly for repeat offenders. The initiative follows reports from the National Audit Office regarding increasing difficulties with non-engaging debtors.

While HMRC’s direct debit authority is limited to British banks, tax debts owed by British citizens residing abroad, such as in France, can be pursued through international recovery assistance. In such cases, local procedural laws and courts govern the recovery process and legal safeguards.