HMRC Debt Recovery: Direct Recovery of Debts (DRD) Explained

Most taxpayers pay their taxes in full and on time. However, a small minority choose not to pay, even when they have the means to do so.

This guide explains how HMRC recovers unpaid tax through Direct Recovery of Debts (DRD), the safeguards in place, and the support available for those in genuine financial difficulty.

1. Why debt recovery matters

Tax pays for essential public services. When individuals or businesses fail to pay, it is unfair to the honest majority.

In the last tax year, HMRC collected £858.9 billion, with about 90% paid on time.
The remaining balance became tax debt.
While many people settle after reminders, some deliberately avoid payment.

Direct Recovery of Debts (DRD) targets only those who can afford to pay but refuse to do so. Before the COVID-19 pause, DRD was used just 19 times in two years.

2. Current update

In the Spring Statement 2025, the government confirmed HMRC would restart DRD after pausing it during the pandemic. The process is now reintroduced under a “test and learn” phase.

3. How Direct Recovery of Debts works

Under DRD powers, HMRC can:

Instruct banks and building societies to transfer money directly from a debtor’s accounts, including Cash ISAs.
Apply DRD only where debts are £1,000 or more.
Ensure safeguards protect taxpayers (see below).

4. Safeguards to protect taxpayers

HMRC has put in place strict rules to ensure fairness and prevent hardship.

Before DRD is considered

Action applies only to established debts beyond appeal deadlines.
Debtors must have ignored repeated attempts to contact them.
HMRC will always arrange a face-to-face visit before DRD is used.

At this visit, HMRC will:

Confirm the taxpayer’s identity and debt.
Explain the amount owed and options to pay.
Offer a Time to Pay plan if appropriate.
Identify vulnerable customers and offer specialist support.

Financial safeguards

DRD only applies to debts over £1,000.
HMRC will always leave at least £5,000 in accounts to cover essentials like wages, mortgages, and bills.

Objections and appeals

Debtors have 30 days to object once DRD is initiated. Funds remain frozen until the objection is reviewed.
Appeals can be made to a county court, including on grounds of hardship.
HMRC Commissioners oversee DRD use, and statistics on use and appeals will be published.

5. Support for those in genuine financial difficulty

HMRC recognises that some people cannot pay due to unexpected life events or business challenges. For these cases:

Time to Pay plans are widely available, with 9 in 10 successfully completed.
An extra support team helps vulnerable customers through phone, video, or webchat.
Debtors identified as vulnerable will not be subject to DRD and will instead be supported by HMRC’s specialist team.

HMRC also works with voluntary organisations and professional bodies to ensure communications provide practical advice and guidance.

Key takeaway

Direct Recovery of Debts is only used against those who can afford to pay but refuse to.
With strong safeguards, appeal rights, and specialist support for vulnerable taxpayers, HMRC balances firm debt recovery with fairness and protection.