Business news and discussion on TalkFuse.
HMRC bank account raid powers spark concern over burden of proof
From July 2029, HMRC is due to gain powers to recover certain unpaid tax debts directly from bank accounts, raising concerns about how it will verify debts and assess taxpayers’ ability to pay. Tax advisers warn that people could struggle to challenge incorrect amounts or distinguish refusal to engage from inability to do so.
The powers would cover debts of up to £5,000 for individuals and £10,000 for companies. Existing rules allow direct recovery only for debts over £1,000 and require at least £5,000 to remain in the account; the government estimates the new measure could raise £50 million in its first year and £320 million in 2031/32. HMRC says it will act only after repeated contact attempts with people able to pay, with safeguards including checks on affordable instalments.
In short
- HMRC plans direct bank account recovery powers from July 2029.
- Advisers question how debts and affordability will be assessed.
- The government expects the measure to raise £320 million in 2031/32.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Direct recovery could help HMRC collect established tax debts more efficiently, reduce the cost of pursuing non-payment and secure revenue for public services. The proposed limits, minimum balance protection, repeated contact attempts and checks on affordable instalments are intended to focus the power on people who can pay while limiting hardship.
The case against
Taking money directly from bank accounts risks serious harm if HMRC has miscalculated a debt or mistaken difficulty engaging for refusal to pay. Individuals and businesses may find it hard to challenge the decision in time, and safeguards may not adequately account for financial circumstances or the practical burden of proving an error.