HM Revenue and Customs (HMRC) has resumed a pre-Covid clampdown on people who owe tax to the Government.
The tax authority has reactivated its powers to extract funds directly from taxpayers' bank accounts following a suspension throughout the coronavirus crisis.
Earlier this week, HMRC confirmed that the Direct Recovery of Debts scheme has entered an experimental "test and learn" stage.
The programme had been shelved during the pandemic but was earmarked for revival in the Government's spring statement.
HMRC could access your bank account directly to claim back owed tax
|GETTY
This initiative permits HMRC to instruct financial institutions to transfer funds from debtors' accounts, including cash ISAs, when taxpayers have the means to settle their obligations but refuse to do so.
The scheme applies to individuals and businesses with outstanding tax debts exceeding £1,000.
However, HMRC emphasised that the measure specifically targets those with sufficient resources who are deliberately avoiding payment.
According to the revenue body's website statement: "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."
The tax authority could access your bank account
| PASeveral protective measures have been built into the system to prevent excessive hardship.
The revenue body will ensure at least £5,000 remains in affected accounts, protecting funds needed for essential expenses like wages and mortgages.
Furthermore, the scheme only pursues those with confirmed debts who have exhausted appeal deadlines and consistently failed to respond to HMRC's contact attempts.
It should be noted that taxpayers retain the right to challenge disputed amounts through automatic appeals.
These safeguards aim to shield vulnerable customers whilst ensuring the programme focuses exclusively on those with both established tax liabilities and the financial capacity to meet their obligations.
Tax dispute resolution partner Dawn Register from BDO offered her perspective on the renewed enforcement measures.
"Given the pressure on public finances, it's clear that HMRC is determined to get tougher on those who can pay but don't pay," she stated.
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| GETTYRegister advised struggling taxpayers to consider instalment arrangements, noting: "For those who are struggling financially we would always recommend that they explore 'time to pay' options to allow them to pay in instalments."
Ahead of the tax authority resuming this debt reclaiming method, Ms Register emphasised the need for careful implementation.
She added "HMRC needs to strike the right balance between supporting businesses and individuals in genuine financial difficulty, while being assertive with those who can afford to pay but choose not to."