Overview

• HMRC has reactivated its Direct Recovery of Debts power in a controlled test-and-learn rollout after a pandemic pause.
• It can require banks and building societies to transfer funds, including from cash ISAs, for established debts of £1,000 or more.
• Rules require HMRC to leave at least £5,000 across a debtor’s accounts to protect essential outgoings.
• Action is limited to cases where appeal deadlines have passed and repeated contact has been ignored, with an automatic right to appeal if the amount is disputed.
• Tax advisers urge pairing tougher collection with flexible Time to Pay arrangements for customers in genuine financial difficulty.