HMRC was given its direct recovery of debts (DRD) powers in 2015. It has used its powers sparingly, making just 19 deductions totalling £361,678 under DRD between April 2016 and December 2018, before pausing all DRD activity during the COVID-19 pandemic.

Following an announcement made in the Spring Statement 2025, HMRC has now confirmed that it has restarted DRD in a “test and learn phase”. HMRC believes that DRD had a strong deterrent effect in the years in which it was used, and the decision to restart activity has been made against a backdrop of efforts to reduce tax debt. 

How DRD works

Under DRD, HMRC can require a bank or building society to pay sums directly from a person’s account or cash Individual Savings Account (ISA) where that person owes HMRC £1,000 or more. The person has 30 days from the start of the DRD recovery process to lodge an objection with HMRC and they can appeal against HMRC’s decision to a county court on specified grounds, including hardship. 

Safeguards

HMRC’s DRD powers are subject to a number of safeguards, including that:

• HMRC will only apply DRD where the person has established debts, has passed the timetable for appeals, and has repeatedly ignored HMRC’s attempts to make contact.
• HMRC guarantees that the person will receive a face-to-face visit from HMRC before their debts are considered for recovery through DRD. At the meeting, HMRC will discuss options to resolve the debt, including offering a time to pay arrangement, and assess whether the person is vulnerable and requires additional support.

HMRC says that it will always leave at least £5,000 in the debtor’s accounts so that it does “not put a hold on money needed to pay wages, mortgages or essential business or household expenses”. 

Extra assistance is available for vulnerable taxpayers.

Further information

• Issue Briefing: Direct Recovery of Debts - GOV.UK
• House of Commons Library briefing paper: Direct recovery of tax debts