Taxation: Debts
The question
To ask the Chancellor of the Exchequer, what estimate she has made of the number of taxpayers who would be affected annually by the proposed extension of powers to recover lower-value tax debts directly from bank accounts.
Answered by Dan Tomlinson
The vast majority of customers meet their tax obligations, with nine in ten paying in full and on time. The majority of liabilities that become a debt are resolved in the first few months as customers engage with HMRC in response to direct communications. When customers do not engage with HMRC, we cannot provide help to resolve their debt or other support as needed.
Each year over 750,000 lower value debts, collectively worth over £2 billion, are returned to HMRC from debt collection agencies where efforts to collect what is owed have been ignored. On 23 June 2026, the Government launched a consultation seeking views on how to tackle these lower-value tax debts. As the policy design is currently subject to consultation, the Government has not made a specific estimate of the number of taxpayers who would be affected annually by any extension of powers to recover lower-value tax debts directly from bank accounts. However, once fully operational, we expect fewer than 250,000 companies and individuals to be in scope per year, with less than that resulting in an automated instalment plan.
A full impact assessment would be conducted at the point of any legislation being brought forward.
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