Her Majesty’s Revenue and Customs (HMRC) is set to receive new authority to directly withdraw unpaid tax debts from individuals’ bank accounts, according to plans expected to be unveiled in the upcoming Budget. This measure aims to recover an estimated £4 billion in outstanding tax liabilities.

Under the proposed changes, HMRC will be empowered to automatically deduct funds from both current and savings accounts without first securing a court order. The move is designed to streamline debt collection processes and improve the efficiency of recovering overdue taxes.

Currently, HMRC must obtain a legal judgment before enforcing deductions from bank accounts, a process that can be time-consuming and costly. The new powers would shorten this timeline, allowing the tax authority to act more swiftly in cases where taxpayers have failed to address their liabilities.

Officials argue that the enhanced authority will help reduce the tax gap by targeting those who deliberately avoid payment. It is expected to supplement existing collection methods and bolster government revenues without requiring additional court resources.

Critics, however, express concerns about the impact on taxpayers, particularly those who may face financial hardship. They urge safeguards to prevent unwarranted deductions and emphasize the importance of clear communication and support for individuals struggling with tax debts.

The government has yet to release full details on how the new enforcement powers will be implemented or the specific thresholds that will trigger automatic deductions. Stakeholders and industry representatives anticipate further guidance following the Budget announcement.