Date posted: 1st Oct 2025
HMRC has announced that it is restarting the use of its Direct Recovery of Debts (DRD) powers, which allow the tax authority to recover unpaid tax directly from individuals’ bank accounts.
DRD was first introduced in 2015 but has been used sparingly before pausing the scheme during the COVID-19 pandemic. HMRC has confirmed that DRD is returning as part of wider efforts to reduce the national tax debt.
How DRD Works
- HMRC can take funds directly from a person’s bank or building society account, including cash ISAs, where tax debts of £1,000 or more are owed.
- Those affected will have 30 days to object and may appeal to a county court on grounds such as financial hardship.
- At least £5,000 will always be left in the account so essential household or business expenses can still be met.
Safeguards in Place
HMRC has confirmed several protections for taxpayers:
- DRD will only be considered after attempts to contact the debtor have been ignored and all appeals deadlines have passed.
- A face-to-face meeting will take place before funds are taken, where repayment options such as a “time to pay” arrangement will be discussed.
- HMRC will assess vulnerability before proceeding, with extra support available for those in financial difficulty.
What Taxpayers Need to Know
With DRD back in action, taxpayers who owe HMRC should respond promptly to correspondence and seek to arrange payment plans where necessary. Ignoring HMRC increases the risk of direct recovery being applied.
If you are concerned about tax debts or have received notice regarding DRD, our team can provide advice on your options and help manage discussions with HMRC.
