Direct recovery of debts

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

Since 18 November 2015, HMRC has had the ability to instruct banks and building societies to deduct amounts to settle taxpayers' tax debts directly from their bank accounts.

Ever since this proposal was first announced in Budget 2014 it has been referred to as ‘direct recovery of debts’ (DRD). While the legislation uses the term 'enforcement by deduction from accounts', this guidance note refers to the provisions as DRD, as this is the term with which advisers are more familiar.

This guidance note discusses the DRD provisions as they apply to individuals.

Summary

Broadly, the DRD process (discussed in detail below, along with the meaning of the important terms) can be summarised as follows:

1)
the taxpayer owes tax debts totalling £1,000 or more, which HMRC has been chasing by post and by telephone
2)
HMRC visits the taxpayer to confirm that the debt (the 'relevant sum') is due and to check whether the taxpayer is 'vulnerable' (no vulnerable taxpayer will have tax debt collected via DRD)
3)
HMRC issues an ‘information notice’ to

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