The Direct Recovery of Debts (DRD) policy, which was paused during the Covid-19 pandemic, has restarted in a ‘test and learn’ phase’, the tax authority has confirmed.
DRD targets individuals and businesses who can afford to pay their debts but deliberately choose not to, HMRC said.
This power enables HMRC to compel banks and building societies to transfer funds directly from a debtor’s account. It applies to debts of £1,000 or more, with safeguards against undue hardship and for vulnerable customers.
Before debts are considered for recovery through DRD, every debtor will receive a face-to-face visit from HMRC agents to personally identify the taxpayer to confirm it is their debt and to discuss options to resolve the debt.
Safeguards include only taking action against those who have established debts, have passed the timetable for appeals, and have repeatedly ignored HMRC’s attempts to make contact.
The safeguards also include leaving a minimum of £5,000 in the debtor’s accounts to ensure that sufficient money is available to pay wages, mortgages or essential business or household expenses.
HMRC said:
‘The vast majority of taxpayers pay their taxes in full and on time, but a minority choose not to pay, even though they have the means to do so.’
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08/10/2025
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