TL;DR
HMRC has restarted Direct Recovery of Debts, the power to take unpaid tax straight from bank accounts, building society accounts and cash ISAs. Use is limited to debtors who owe at least £1,000, who can afford to pay and who have ignored repeated HMRC contact. A combined £5,000 minimum balance must be left across all accounts.
Last reviewed: 5 June 2026
HMRC has confirmed that its Direct Recovery of Debts (DRD) scheme is operating again, four years after activity was paused during the COVID-19 pandemic. The HMRC Issue Briefing updated on gov.uk on 26 February 2026 sets out how the scheme works and the safeguards that apply. The relaunch was first announced in the Spring Statement 2025 and is now in a "test and learn" phase.
Key Facts
- Power source: Schedule 8 of the Finance (No.2) Act 2015
- Minimum debt threshold: £1,000
- Combined minimum balance left in accounts: £5,000
- Covered accounts: current, savings, building society and cash ISAs
- Used 19 times between April 2016 and December 2018
- Total tax owed to HMRC: £42.8 billion
- Spring Statement 2025 funding: £630 million plus 2,400 new debt management staff
How Direct Recovery of Debts works
HMRC begins by identifying a debtor who has both the means to pay and a sustained refusal to pay. A face-to-face visit is used to confirm awareness of the debt. HMRC then issues a hold notice to the bank or building society, which freezes the relevant funds.
The debtor has 30 days from notification to object. There is a further right of appeal to the county court before any money is released to HMRC. Funds are only transferred once those objection routes have been exhausted.
When DRD cannot be used
DRD is not available against debts below £1,000, against debtors who have not been formally contacted by HMRC, or against accounts that would be left with less than £5,000 across all balances combined. Vulnerable taxpayers are excluded from DRD action.
The Low Incomes Tax Reform Group has asked HMRC for clarification on how vulnerable status will be defined and what additional support will be available for affected customers.
What this means for people in genuine difficulty
For taxpayers who cannot afford to pay, HMRC offers Time to Pay arrangements that spread the debt over manageable instalments. Engaging with HMRC at the earliest stage typically avoids escalation. DRD is reserved for debtors who can pay but choose not to, not for those in financial hardship.
Wider context
The Spring Statement 2025 confirmed £630 million of investment in HMRC’s debt management function, including 2,400 additional staff, with a target of collecting £11 billion of additional tax debt by the end of 2030. The relaunch of DRD sits alongside that wider effort.
Editor’s note: Anyone receiving correspondence from HMRC about an unpaid tax debt should respond before any DRD process begins. Engaging early opens the door to Time to Pay options that are unavailable once DRD is triggered.
Related guides
Disclaimer: This article is for general information only. It does not constitute legal, tax or financial advice. Taxpayers receiving notification of HMRC action should seek guidance from an authorised tax adviser or contact HMRC directly.
Frequently asked questions
How much do I have to owe before HMRC can take money from my bank account?
HMRC’s Direct Recovery of Debts powers apply only to debtors who owe at least £1,000 in tax, tax credits or related debt and who have repeatedly ignored HMRC contact.
Can HMRC empty my account under DRD?
No. HMRC must leave a combined minimum balance of £5,000 across all accounts held by the debtor before any deduction can be made.
Can HMRC take money from a cash ISA?
Yes. The Issue Briefing confirms that cash ISA balances are within the scope of Direct Recovery of Debts alongside current and savings accounts.
Can I object to a DRD hold notice?
Yes. The debtor has 30 days from notification to object. There is a further right of appeal to the county court before any funds are released to HMRC.
Sources
- HMRC, Issue Briefing: Direct Recovery of Debts (gov.uk, updated 26 February 2026)
- HM Treasury, Spring Statement 2025
- Finance (No.2) Act 2015, Schedule 8 (legislation.gov.uk)
- HMRC, Review of the Direct Debt Recovery Intervention, April 2019 (gov.uk)
- Low Incomes Tax Reform Group, announcement on DRD restart
