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.

Note that DRD was paused during the coronavirus (COVID-19) pandemic, but it was announced at Spring Statement 2025 that DRD is being resumed.

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

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Value Added Tax

Reverse charge ― buying in services from outside the UK

Reverse charge ― buying in services from outside the UKThis guidance note covers the reverse charge that applies to services that have been bought in from outside the UK. For an overview of VAT and international services more broadly, see the International services ― overview guidance note. For

15 Dec 2020 14:02 | Produced by Tolley Read more

Employment Tax

Ministers of religion

Ministers of religionMost ministers of religion or members of the clergy are either office-holders or employees and so their earnings are taxable under ITEPA 2003 as employment income and are subject to Class 1 National Insurance.For the purposes of the tax system, a minister does not have to belong

14 Jul 2020 12:14 | Produced by Tolley Read more

UU��ֱ��