Most people pay their tax bill. But there remains a small minority of people who have the means to pay their tax but do not. To resolve this, HMRC can take unpaid tax directly from the bank accounts of businesses or individuals. This is called Direct Recovery of Debts or DRD.
How DRD works
DRD was introduced in 2015, but was only used sparingly, and during the COVID-19 pandemic, it was suspended. In 2025, the government’s Spring Statement announced that DRD would be restarted in a “test and learn phase”.
In DRD, HMRC can require building societies and banks to pay directly from a debtor’s account if the debt is £1,000 or more.
Most people should not be concerned, as this will only be used against those who refuse to pay tax, even though they can. But if you have concerns about tax, contact HMRC or get advice from an accountant. Find one through a relevant internet search for your area. For example, business accountants Tewkesbury will give you results including hazlewoods.co.uk/expertise/business-accountants/tewkesbury/.
Safeguards
There are a number of safeguards to ensure the process is fair, with HMRC committed to transparency. Firstly, DRD will only be applied after appeal rights have expired and where attempts at contact have been ignored. There will also be a face-to-face visit from an HMRC agent to discuss alternative arrangements.
A taxpayer identified as vulnerable will be removed from DRD and offered additional support. After DRD, there must be at least £5,000 left in the account. There will also be the right to appeal.
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