By James Rodger

Copyright birminghammail

HMRC is taking money directly from bank accounts after resuming rules which were paused during the Covid crisis. HMRC is set to enter bank accounts to retrieve cash from taxpayers after having previous powers reinstalled. Kevin White, a personal finance expert, warned UK households could see cash “vanish”. Taking to TikTok, he said: “Did you know that HMRC can now reclaim any overdue tax bills directly from your bank account? “Using powers that were turned off during Covid, they’ve recently turned them back on. So that means, if you owe tax of over £1,000, they can come to you directly and take it out of your bank account; however, there are some conditions before they can do it. READ MORE Free bus passes could be extended to one group of under 66s “Firstly, you have to have ignored tax reminders so, if you’ve ignored that tax, then they can come and then they’ll have to knock on your door and prove who you are. Before they’ve done those two things, they can’t take any money out of your bank account.” Journalist Dan Whitworth joined BBC Morning Live earlier this week to say: “Only under very specific circumstances. The power comes from something called Direct Recovery of Debts (DRD). “The idea is to help HMRC recover tax debts from people who owe at least £1,000, have ignored repeated attempts to make contact, and have no valid appeals outstanding. “While it sounds alarming, the scale of use in the past shows how rarely it happens. When the DRD scheme was first introduced in 2016, HMRC estimated it might be used around 11,000 times a year, but in the two years it was active, up to 2018, it was used only 19 times.” A spokesperson for HMRC told BBC Morning Live: “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.” HMRC says: “Individuals and businesses need to pay the tax that is due otherwise it is unfair on the honest majority. The money we collect is vital to fund public services. “The vast majority of people pay their taxes in full and on time. Last year, HMRC brought in £858.9 billion in tax. About 90% was paid on time but the rest became a debt. “Some people require an additional prompt or reminder to pay what they owe, and a significant number of people pay once they are contacted. “Direct Recovery of Debts (DRD) is used when an individual or business can afford to pay what they owe but are choosing not to. These powers are an effective incentive to pay and were used only 19 times in two years, before pausing during the COVID-19 pandemic.”