Since 18 November 2015, HMRC has had the ability to instruct banks and building societies to deduct amounts to settle businesses and individuals tax debts directly from their bank accounts.
Ever since this proposal was first announced in Budget 2014 it has been referred to as ‘direct recovery of debt’ (DRD). Whilst the legislation uses the term 'enforcement by deduction from accounts', this guidance note refers to the provisions as DRD as this is the term with which businesses, or their advisers, are familiar.
More information on the background to the introduction of DRD can be found in HMRC Issue Briefing: Direct Recovery of Debts.
Please note that the term “taxpayer” or “person” below refers to both businesses and individuals.