Budget 2014 announced a new DRD power that will allow HMRC to recover tax and tax credit debts directly from debtors’ bank and building society accounts, including Individual Savings Accounts, with the aim of modernising HMRC's collection of debt and bringing the UK into line with other countries. A similar power is already available in Ireland to the Revenue Commissioners.

The consultation for this proposal has now been launched providing further details of the measure, in addition to outlining how it will work in practice. Responses are due by 29 July 2014.

Broadly, debts will only be suitable for DRD where there is a tax or tax credit debt of £1,000 or more due to HMRC. This £1,000 debt could be owed against just one tax or could be made up from smaller debts owed across a range of taxes. National Insurance Contributions will also be included.

Views are sought on how best to implement the policy, including how to establish balanced and fair safeguards to avoid debtors suffering undue hardship. A response to the consultation is expected to be published in autumn 2014, with draft legislation published at Autumn Statement 2014. The legislation would then be taken forward at Finance Bill 2015.