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Direct recovery of debts and vulnerable taxpayers

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HMRC has set out the criteria it intends to use to identify ‘vulnerable’ taxpayers under a new direct recovery of debts (DRD) policy paper ( The new DRD powers allow HMRC to recover tax and tax credit debts from people and businesses directly from their bank accounts. However, if an HMRC official judges that an individual taxpayer is at a particular disadvantage, then (as set out in legislation) HMRC will consider whether the DRD power is appropriate and, if not, what ‘reasonable adjustments’ may be required.

Meanwhile, The Enforcement by Deduction from Accounts (Imposition of Charges by Deposit-takers) Regulations, SI 2016/Draft, set out when banks and building societies may pass on an administrative charge to debtors for processing a HMRC DRD ‘hold’ notice. These are open for consultation until 8 January 2016 (

The Enforcement by Deduction from Accounts (Prescribed Information) Regulations, SI 2015/1986, come into force on 25 January 2016 and specify the information that deposit-takers will have to provide on receipt of either an information notice or hold notice, to enable HMRC to determine whether direct recovery of a tax debt from a taxpayer’s bank account is appropriate, under new powers contained in F(No. 2)A 2015 Sch 8.

Issue: 1291
Categories: News