The tax authority has been granted the authority to directly access individuals’ bank accounts and retrieve funds from those who have failed to meet their tax obligations.

HM Revenue & Customs (HMRC) can now extract money directly from accounts of debtors owing more than £1,000 to the agency, including cash ISAs, a move criticized as “draconian” by tax professionals.

The initiative, known as Direct Recovery of Debts (DRD), was introduced in 2015 but was paused during the Covid pandemic. It has been reinstated following approval from Chancellor Rachel Reeves during the Spring Statement in March 2025.

The primary objective of the program is to target individuals capable of settling their tax debts but have persistently neglected to do so, according to officials. Most impacted individuals are likely those who submit self-assessment tax returns, such as self-employed individuals or those with substantial income from investments, rental properties, or savings interest.

Before any funds are withdrawn from their accounts, taxpayers can anticipate a visit from HMRC agents to confirm the identity of the taxpayer, verify the debt, and explore repayment options prior to taking any action.

Under the new regulations, individuals must retain at least £5,000 in their accounts for essential expenses, and HMRC must allow a 30-day appeal period before initiating direct withdrawals.

HMRC has stated that individuals classified as ‘vulnerable’ will not be targeted under the program. Nonetheless, some tax experts have criticized the new powers, emphasizing the agency’s increased determination to pursue delinquent taxpayers.

Government data reveals that HMRC is owed £42.8 billion in unpaid taxes, a figure that has risen significantly post-pandemic. The government aims to recover an additional £11 billion in outstanding debt by 2030.

To bolster HMRC’s debt recovery capabilities, the treasury has allocated £630 million, leading to the recruitment of 2,400 new debt management personnel.

An HMRC spokesperson affirmed that while the majority of taxpayers fulfill their obligations promptly, it is crucial to pursue those who deliberately evade payment despite possessing the means to do so. The spokesperson reassured that stringent safeguards are in place, and support will continue to be extended to customers requiring assistance with their tax payments.