HMRC can already take money directly from the accounts of debtors who owe more than £1,000

Hundreds of thousands of taxpayers could soon face tougher action from HMRC over unpaid tax bills.

New proposals would give the tax authority greater powers to recover money directly from people's bank accounts.

HMRC is planning to expand its existing powers so it can automatically recover outstanding tax debts, including some worth as little as 1p.

Documents published on Tuesday show the tax authority wants to use the powers to collect a much higher volume of smaller debts.

The proposals would also remove the current rule requiring taxpayers to be left with at least £5,000 in their bank account after money has been taken.

At present, HMRC can only recover money directly from bank accounts where someone owes more than £1,000, and it must leave at least £5,000 in the account.

Those safeguards have been in place since the powers were introduced in 2015.

Up to 250,000 people with tax debts of £5,000 or less could be affected by the changes, according to The Telegraph.

The plans have attracted criticism from tax experts, who say 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 also raised the prospect of wrongful collections, noting: "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."

The tax authority has previously faced criticism over miscalculated tax codes and improper use of its surveillance capabilities.

Advocacy groups have voiced alarm over the absence of protections for those on limited incomes.

Victoria Todd, of the Low Incomes Tax Reform Group, said: "We are particularly concerned that the proposals do not currently include a minimum amount that must be left in a taxpayer's account. For those living on a tight budget, deductions could leave them struggling to meet essential living costs."

She emphasised that HMRC must develop robust methods to identify vulnerable individuals and distinguish them from those deliberately avoiding payment.

Robert Salter, of Blick Rothenberg, added: "Is there a risk that such automatic collection arrangements could drive taxpayers into further debt?"

HMRC has indicated it may cap deductions at 50 per cent of a customer's disposable income, though this remains under consideration.

Ministers have defended the expanded powers as essential for maintaining a fair tax system.

Dan Tomlinson, the exchequer secretary to the Treasury, 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."

The measures form part of broader efforts to address Britain's growing tax gap, which reached £59.2bn in 2024-25, rising from £46.8bn the previous year.

HMRC stated that more than 750,000 lower value debts totalling over £2billion remain uncollected annually despite at least 10 contact attempts.