A reported plan to let HMRC recover smaller tax debts directly from current and savings accounts has reopened a dispute over where efficient tax collection ends and disproportionate enforcement begins.

The measure is reported to be aimed at roughly £4 billion in unpaid debts involving 4.8 million people and businesses, each owing less than £10,000. Under existing rules, direct recovery generally applies only to debts above £1,000 and requires taxpayers to retain at least £5,000 across their accounts; the proposed approach could lower the debt threshold substantially.¹

Right-wing critics have focused on the prospect of money being removed without a court order, particularly if the process becomes automated. Former prime minister Liz Truss called the idea “Dystopian,” arguing that the Treasury wanted “the power to take money direct from your bank account.”Liz Truss (trussliz)² Tax policy specialist Dan Neidle raised a narrower concern: an automated system might fail to distinguish deliberate non-payment from people affected by illness, financial difficulty or missed HMRC correspondence. “It would be good to understand the safeguards that will be put in place,” he said.³

HMRC’s stated position differs in emphasis. It has said the powers would address a “significant minority” of customers who repeatedly do not engage, rather than people who simply make an error. Before using direct recovery, the authority says it would contact taxpayers at least 10 times, identify those needing additional support, allow them to explain their circumstances and offer clear challenge and independent-review rights.¹

The disagreement is therefore less over the scale of unpaid tax than over the reliability of those protections. Critics want firm detail before lower-value debts can trigger intervention; HMRC maintains that affordability checks and appeal routes are meant to ensure the power is used fairly and proportionately.³