The UK tax authority is set to gain expanded powers to recover unpaid tax debts by automatically deducting funds from individuals’ and businesses’ bank accounts without requiring a court order. The measures, expected to be unveiled at the upcoming Budget, aim to address a growing tax gap estimated at £60 billion.

Under current regulations, Her Majesty’s Revenue and Customs (HMRC) can only seize money from bank accounts when taxpayers owe more than £1,000 and retain at least £5,000 after repayment. The proposed changes could significantly reduce these thresholds, allowing HMRC to recover debts of just a few pounds, including unpaid fines and accrued interest. HMRC estimates that approximately 4.8 million taxpayers—both individuals and businesses—owe less than £10,000 each, with the average unpaid individual tax bill at around £950.

The government intends to target those who repeatedly fail to settle relatively small amounts, aiming to improve overall tax compliance and increase recovery rates. Additionally, HMRC is reportedly considering leveraging credit reference agencies to evaluate taxpayers’ financial situations and establish repayment capacities, with earlier discussions suggesting recovery rates up to 50 percent of disposable income.

The move has raised concerns among consumer advocates and some experts, who warn that vulnerable individuals could be disproportionately affected, potentially facing automatic deductions due to administrative mistakes, health issues, or missed communication. Under the proposed system, taxpayers would bear the responsibility of contesting any disputed deductions. Meanwhile, government sources maintain that the approach will incorporate stringent safeguards to protect taxpayers from wrongful seizures.

The Treasury declined to comment ahead of the official Budget announcement. The forthcoming policy adjustments reflect ongoing government efforts to tighten enforcement and reduce tax avoidance amid growing fiscal pressures.