HMRC have issued a briefing, 'Direct Recovery of Debts'. It confirms that HMRC have resumed their programme allowing the direct recovery of money from debtors’ bank accounts. The reactivation of the scheme was signalled in the government's Spring Statement.
The Direct Recovery of Debts (DRD) policy was first introduced in 2015, but was paused during the COVID pandemic. HMRC have said that it is in a 'test and learn' phase.
The powers allow HMRC to compel banks and building societies to transfer funds directly from a debtor’s account. This includes a cash Individual Savings Account (ISA).
HMRC emphasised that the DRD policy targets those who can afford to pay their debts but deliberately choose not to and will be applied to debts of £1,000 or more.
There are safeguards:
- Action is only taken against those who have established debts.
- They have passed the timetable for appeals.
- They have repeatedly ignored HMRC’s attempts to make contact.
- There needs to be at least £5,000 left in cash with the debtor.
External links
HMRC Corporate report: Issue Briefing: Direct Recovery of Debts