HMRC expands bank account powers to take 1p from taxpayers
HMRC expands bank account powers to take 1p from taxpayers
HMRC could soon be allowed to recover unpaid tax directly from bank accounts over debts as small as 1p under new Government proposals. The plans would also remove a rule requiring officials to leave at least £5,000 in a taxpayer's account
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Add us as preferred source Comments By Taila Nichole Thompson 15:57, Fri, Jun 26, 2026 Updated: 15:57, Fri, Jun 26, 2026 
HMRC could be given the power to recover unpaid tax directly from people's bank accounts even if they owe as little as 1p under new Government proposals.
The plans, which are now out for consultation, would remove the current £1,000 minimum debt threshold before HMRC can use its Direct Recovery of Debts powers.
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If approved, the changes would mean the tax authority could, in theory, recover debts of any value, although ministers insist the powers would be used only against people who can afford to pay but repeatedly refuse to do so.
The consultation also proposes scrapping the existing rule that requires HMRC to leave at least £5,000 in a taxpayer's bank account after recovering money.
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At the moment, HMRC can only recover money directly from bank accounts where someone owes more than £1,000, with both safeguards having been in place since the powers were introduced in 2015.
The proposal does not mean HMRC would automatically take 1p from every taxpayer. Instead, removing the threshold would allow officials to pursue smaller unpaid tax debts where they believe someone has repeatedly ignored requests to pay.
HMRC estimates fewer than 250,000 individuals and businesses each year would be eligible for the expanded powers, with fewer still expected to end up on automatic repayment plans.
The proposals have prompted concern among tax experts, who argue the measures could give HMRC too much power.
Nimesh Shah, of tax firm Blick Rothenberg, said: "I have some sympathy for HMRC for having to expend significant time to chase smaller amounts and the associated time and cost can be higher than the amount involved."
However, he warned: "My concern is that this could be used as a 'sledgehammer' by HMRC without the proper safeguards in place."
He added: "There is also the issue of where HMRC have assessed the incorrect amount of tax and they then use this power to recover an amount which actually isn't due."
Victoria Todd, of the Low Incomes Tax Reform Group, also questioned whether the proposals go far enough to protect people on lower incomes.
She said: "We are particularly concerned that the proposals do not currently include a minimum amount that must be left in a taxpayer's account."
She added: "For those living on a tight budget, deductions could leave them struggling to meet essential living costs."
Todd said HMRC would need robust systems to identify vulnerable taxpayers and distinguish them from those who are deliberately refusing to pay.
Robert Salter, also of Blick Rothenberg, raised further concerns, asking: "Is there a risk that such automatic collection arrangements could drive taxpayers into further debt?"
HMRC has suggested deductions could be capped at 50% of a person's disposable income, although that proposal is still being considered as part of the consultation.
Defending the plans, Exchequer Secretary to the Treasury Dan Tomlinson said: "The vast majority pay on time and in full, so it's vital for a fair tax system that we seek to recover debt from those who can afford to pay but refuse to."
He added: "These extended powers would ensure fairness for all taxpayers, while support will continue to be offered to those wanting help with their payments."
According to HMRC, more than 750,000 lower-value tax debts worth more than £2billion go uncollected every year despite officials attempting to contact taxpayers at least 10 times. The measures form part of wider efforts to reduce the UK's tax gap, which reached £59.2billion in 2024-25, up from £46.8billion the previous year.
The consultation is open until August 28.
Badenoch blasts 'moaning' female Labour MPs over Burnham jobs 'quota'
Kemi Badenoch has told Labour women to earn a job in Andy Burnham's Cabinet instead of demanding they are handed jobs because of their gender.
The Tory leader lashed out today amid reports that female MPs are demanding the de-facto new prime minister introduce a 50:50 gender split 'quota' in his government.
Amid reports that former foreign secretary David Miliband is being lined up to return to the role, possibly with his brother Ed as Chancellor, one female minister also complained that Burnham could not have 'more Milibands than women' in the top posts.
But in a scathing article in the Times today Mrs Badenoch told them to 'stop moaning' and get chosen on merit instead of retreating into 'more of the failed identity politics that is holding back our country'.
'There are many, many reasons why you shouldn't have any Milibands in the cabinet,' she said.
'But complaining that the boys haven't given them the right jobs or that the boys are taking all the jobs, just shows that Labour's women still don't get it.'
The idea of quotas was also attacked by Baroness Jacqui Smith, Labour's Skills Minister.
Asked by Times Radio if Mr Burnham should reserve jobs for women, she said: 'No, I think what Andy Burnham should be doing is building the very best team around him to change this country.'
A letter written by the Women's Parliamentary Labour Party has called on Mr Burnham to ensure a 50:50 split between men and women in government jobs
Amid reports that former foreign secretary David Miliband (above, right, in 2010) is being lined up to return to the role, possibly with his brother Ed as Chancellor, one female minister complained that Burnham could not have 'more Milibands than women' in the top posts
But Mrs Badenoch told them to pipe down and get chosen on merit instead of retreating into 'more of the failed identity politics that is holding back our country'
A letter written by the Women's Parliamentary Labour Party and seen by the BBC has called on Mr Burnham to ensure a 50:50 split between men and women in government jobs after he succeeds Sir Keir Starmer.
'We are asking you to demonstrate this change from day one and address the toxicity and misogyny within our own party and government,' it said.
Labour has never had a female leader, while the Conservatives have had three, and Mrs Badenoch urged the government to follow its meritocratic example.
'If you run a meritocracy, then you do not have to worry about jobs for the boys,' she wrote.
'Every woman who is a Conservative MP, every woman who has ever won the leadership, has had to fight to get where she is.
'By contrast, Labour women are demanding guarantees from Burnham. But the truth is he doesn't have to give any guarantees.
'If none of Labour's women are prepared to get their hands dirty and challenge him for the leadership, their demands are toothless.'
'In fact, it's quite revealing that the women's parliamentary Labour Party has written to Burnham asking him to commit himself to at least 50 per cent female ministers.
'This has nothing to do with meritocracy. It is yet more of the failed identity politics that is holding back our country.'
