The UK tax authority, HMRC, has officially reinstated a legal mechanism allowing it to withdraw money directly from personal bank accounts in cases of unpaid tax bills. This administrative power, which had been suspended during the Covid-19 pandemic, has now quietly returned to active use.
According to a report by Birmingham Live and widely shared across UK media outlets, the decision has prompted renewed public attention and clarification efforts from financial experts and government spokespeople. While the tool itself is not new, its reactivation signals a shift in enforcement priorities as HMRC addresses outstanding debts across individuals and businesses.
From Covid Suspension To Renewed Enforcement Powers
The mechanism behind this policy is known as Direct Recovery of Debts (DRD), a legal tool that allows HMRC to take money directly from bank accounts under specific conditions. Speaking on BBC Morning Live, journalist Dan Whitworth explained:
Only under very specific circumstances. The power comes from something called Direct Recovery of Debts (DRD).
He further added that the DRD targets people who owe at least £1,000, have ignored repeated attempts at communication, and have no valid appeals in progress.
Although the measure might sound severe, its real-world application has been minimal.
When the DRD scheme was first introduced in 2016, HMRC estimated it might be used around 11,000 times a year, said Whitworth.
But in the two years it was active, up to 2018, it was used only 19 times.
The DRD scheme had been paused during the Covid crisis to avoid pressuring households already struggling with economic hardship. Its reactivation marks a turning point in how the government deals with persistent tax debt and non-compliance.
Financial Experts Warn: “They’ll Knock On Your Door”
Kevin White, a personal finance expert active on TikTok, drew attention to the changes in a video that has since sparked widespread concern. He warned:
Did you know that HMRC can now reclaim any overdue tax bills directly from your bank account? – White emphasized that these powers were paused during Covid but are now back in full effect:
Using powers that were turned off during Covid, they’ve recently turned them back on. So that means, if you owe tax of over £1,000, they can come to you directly and take it out of your bank account; however, there are some conditions before they can do it.
He detailed the steps required before any action can be taken:
Firstly, you have to have ignored tax reminders so, if you’ve ignored that tax, then they can come and then they’ll have to knock on your door and prove who you are. Before they’ve done those two things, they can’t take any money out of your bank account.
The mention of “knock on your door” is both figurative and procedural. HMRC must verify identity and provide opportunity for response before executing any recovery. This multi-step process is designed to ensure the powers are not applied indiscriminately.
HMRC Defends DRD With Moral and Financial Arguments
In defense of the DRD’s reactivation, HMRC stated on BBC Morning Live:
Most people pay tax on time and in full – but it’s right that we seek to recover tax from the tiny minority who have the funds to pay, but refuse to.
The agency also stressed that the powers are not open to abuse:
These powers are subject to robust safeguards and we’ll continue to support customers who need help with their payments.
In a broader statement, HMRC added:
Individuals and businesses need to pay the tax that is due otherwise it is unfair on the honest majority. The money we collect is vital to fund public services.
In 2024, HMRC collected £858.9 billion in tax revenue. About 90% of that was paid on time, but the remaining 10% became a debt. It’s in this slice of the population that the DRD policy finds its purpose. According to HMRC,
Some people require an additional prompt or reminder to pay what they owe, and a significant number of people pay once they are contacted.
The agency emphasized that DRD is not aimed at people in financial distress but at those who can afford to pay but deliberately avoid doing so.
Direct Recovery of Debts (DRD) is used when an individual or business can afford to pay what they owe but are choosing not to. These powers are an effective incentive to pay and were used only 19 times in two years, before pausing during the COVID-19 pandemic.
This statement reinforces that HMRC’s approach is primarily corrective and incentivizing, not punitive. Still, the ability to tap into personal bank accounts without court approval remains controversial and continues to fuel debate about the balance between enforcement and fairness in public finance.
