By Ben Hurst,Ben Test Hurst-BM,Robert Harries

Copyright walesonline

HM Revenue and Customs (HMRC) has confirmed the restart of a scheme enabling it to directly retrieve outstanding debts from individuals’ bank accounts. The policy, which was suspended throughout the Covid-19 pandemic, has now been relaunched as part of a “test and learn” approach, HMRC revealed this week. Direct recovery of debts (DRD) is deployed when a person or company has the financial means to settle their obligations but is choosing not to do so, the tax authority has explained. During the spring statement, the Government announced that HMRC would resume DRD for those refusing to pay what they owe. For money-saving tips, sign up to our Money newsletter here . This enables HMRC to retrieve outstanding sums by directing banks and building societies to take money directly from a debtor’s account, including funds stored in cash Isas, reports the Express . The measure can be applied where debtors owe £1,000 or above, with specific protections established to prevent debtors from facing excessive hardship and to safeguard vulnerable customers. These protections include targeting only those with confirmed debts who have surpassed appeal deadlines and who have repeatedly disregarded HMRC’s contact attempts. Anyone challenging the sum claimed retains an automatic right of appeal, the tax body confirmed. The safeguards also require maintaining a minimum £5,000 balance in debtors’ accounts to ensure HMRC doesn’t restrict funds required for salaries, mortgage payments or vital business or domestic expenditure. HMRC has issued a statement on its website, saying: “The vast majority of taxpayers pay their taxes in full and on time, but a minority choose not to pay, even though they have the means to do so.” Dawn Register, a tax dispute resolution partner at BDO, remarked: “Given the pressure on public finances, it’s clear that HMRC is determined to get tougher on those who can pay but don’t pay. “For those who are struggling financially we would always recommend that they explore ‘time to pay’ options to allow them to pay in instalments. “HMRC needs to strike the right balance between supporting businesses and individuals in genuine financial difficulty, while being assertive with those who can afford to pay but choose not to.” An HMRC spokesperson further added: “Most people pay tax on time and in full – but it’s right that we seek to recover tax from the tiny minority who have the funds to pay, but refuse to. “These powers are subject to robust safeguards and we’ll continue to support customers who need help with their payments.”