HMRC to expand direct bank account seizures for tax debts under £1,000

The UK tax authority is removing the £5,000 buffer rule, allowing it to collect smaller arrears directly from accounts. The move signals a tightening of fiscal enforcement amid broader government spending pressures.

By Handelsavisen Newsroom · Automated 2026-06-25 12:11 UTC · 1 min read

HM Revenue & Customs is preparing to significantly expand its powers to seize funds directly from taxpayers' bank accounts, removing a long-standing protection for smaller debts.

Under the proposed changes, the tax authority would be able to collect arrears of less than £1,000 in instalments without leaving a mandatory £5,000 buffer in the account, a threshold that previously shielded many low-balance accounts from direct intervention.

The shift marks a notable escalation in the UK government's approach to tax collection, moving beyond the current framework that prioritizes preserving a minimum level of liquidity for individuals facing enforcement action.

By lowering the barrier for direct account access, HMRC aims to recover smaller, fragmented debts that have historically been difficult or costly to pursue through traditional means.

This development aligns with a broader trend of fiscal tightening across the UK public sector.

Government ministers are currently preparing to cut budgets across several departments to fund increased defence spending, according to recent reports.