The government will take money directly from the bank accounts of tax evaders under new powers, reports BritPanorama.
HM Revenue & Customs (HMRC) will have the authority to deduct money from current and savings accounts of people who fail to pay their tax bill, The Times reported. This latest move by Chancellor John Healey, set to be announced in the Autumn Budget on Wednesday, is a response to Britain’s gaping £60 billion tax debt.
For small unpaid debts, HMRC estimates that around 4.8 million people and companies hold debts below £10,000, totalling about £4 billion. This equates to an average debt of £950 for individual customers.
Currently, HMRC can take money directly from the accounts of debtors who owe more than £1,000 in tax, provided they have at least £5,000 remaining after the debt is recovered. These powers, which came into force in 2015, were paused during the pandemic and reintroduced by Labour in 2025.
However, this threshold could be slashed to as little as a few pounds for taxpayers who have repeatedly dodged HMRC. The deductions could also include repaying fines and interest.
Andrew Griffith, the shadow chancellor, told The Times the move was “absurd,” accusing Labour of giving the taxman the power to “empty your bank account over a few hundred pounds and leave you with nothing to pay the rent.”
The Association of Taxation Technicians (ATT) expressed concerns that these new powers should not be introduced until adequate safeguards are in place and the right taxpayers are targeted.
It comes as the National Audit Office (NAO) highlighted that HMRC faces increasing issues from debtors who do not engage with it. Since 2021, HMRC has implemented new measures to manage tax debt, such as recruiting more staff, increasing the use of private sector debt collection agencies, and using data to tailor its approach to different debtors.
HMRC estimates these measures have generated £10.7 billion in additional revenue by the end of 2025-26, against spending of £368 million.
Mr. Healey’s first Budget as chancellor is also rumoured to include a tax crackdown on online retailers, focusing on ensuring that multibillion-pound online marketplaces like Amazon, eBay, and Temu are responsible for collecting tax owed by retailers selling on their platforms.
This policy aims to crack down primarily on foreign sellers who abuse the rules to evade VAT, potentially raising as much as £1 billion, which could be used to cut business rates for high street shops.
Additionally, there has been speculation regarding a possible increase in bank taxes in his Budget. The TUC union has urged the prime minister to introduce a windfall tax on banks due to their “huge” profits and bonus payments, suggesting the funds be used to reduce energy bills via a social tariff for two in three households.
The Treasury stated: “As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
