Can HMRC Access Your Bank Account? The 2026 Rules and the New Debt Power From 2029

HM Revenue and Customs (HMRC) cannot log in to your bank account or watch your spending in real time. What it does get is a yearly report from UK banks and building societies on the savings interest they paid you, and it can legally require a bank to hand over statements through a written information notice. Separately, under the Direct Recovery of Debts (DRD) power in the Finance (No. 2) Act 2015, it can take money straight from a current or savings account, but only from people who owe more than £1,000, have ignored repeated contact and would still have at least £5,000 left. In the Budget on 28 October 2026, Chancellor John Healey confirmed a second, separate power for smaller debts: from July 2029, HMRC will be able to take regular instalments from the bank accounts of people and companies who can afford to pay but repeatedly fail to do so. It needs new legislation first. This page sets out both.

Can HMRC see my bank account?

Not in the sense of browsing it. GOV.UK guidance says that after 5 April each year your bank or building society tells HMRC how much interest it paid you in the previous tax year. HMRC adds up the interest from all your accounts and sends a tax calculation by post or through your Personal Tax Account if tax is due. ISA interest is not taxed. To see them, HMRC has to use one of its formal information powers, and it usually asks you first.

How can HMRC get my bank records?

The main route is Schedule 36 of the Finance Act 2008. An HMRC officer can send a taxpayer notice asking you for documents, or a third-party notice to a bank, where the material is "reasonably required" to check your tax position or, since the Finance Act 2021, to collect a tax debt. A third-party notice to a bank normally needs your agreement or approval from the tax tribunal. The Finance Act 2021 also added paragraph 4A, the Financial Institution Notice (FIN). It needs neither your agreement nor a tribunal's, only sign-off from an authorised HMRC officer. HMRC's Compliance Handbook (CH23105 to CH23120) says officers should first ask the taxpayer for statements, must give you a copy of the FIN and a summary of reasons, and must never make an informal request to a bank. The 28 October 2026 Budget announced that Finance Bill 2026–27 will extend the Financial Institution Notice to cryptoasset service providers, as part of wider updates to Schedule 36 that take effect from Royal Assent.

Can HMRC take money from my bank account?

Yes, under DRD, which lets HMRC instruct a bank to pay it directly from current accounts, savings accounts and cash ISAs. HMRC's issue briefing, updated in June 2026, says the power was used only 19 times in two years before it was paused in the COVID-19 pandemic. The Spring Statement 2025 announced a restart, a controlled test phase began in September 2025 and wider use followed from April 2026. The conditions are a tax or tax credits debt of more than £1,000 that is established and past its appeal deadlines, repeated ignored contact, and at least £5,000 left across the debtor's accounts. Every individual gets a face-to-face visit from HMRC first, where a Time to Pay plan can be offered. People who need extra support are taken out of the process. Once funds are frozen, the account holder has 30 days to object, and if HMRC rejects the objection they can appeal to a county court, including on hardship grounds.

What did the 2026 Budget change?

The Budget confirmed a new power, alongside DRD, to recover lower-value tax debts through regular monthly deductions from bank accounts where people and companies repeatedly fail to engage with HMRC. According to the Budget's costing note, it will start in July 2029 for VAT and PAYE debts, April 2030 for Self Assessment and Simple Assessment debts and April 2031 for Corporation Tax, and HMRC intends to begin with companies before applying it to individuals. It covers established debts of up to £5,000 for individuals and £10,000 for companies, including interest and penalties, and would only be used after normal collection has failed, typically after at least 10 contacts and with a debt at least nine months old. HMRC expects fewer than 250,000 deduction plans a year, and the Budget forecasts the power will raise £50 million in 2029–30, rising to £320 million in 2031–32. The Times had reported that the minimum could fall to a few pounds. The government has set no fixed floor, but says it will not start plans where collection costs more than the debt and may set an operational threshold in a Code of Practice.

HMRC's response to its consultation, published with the Budget, changed several safeguards. The notice before the first deduction rises from the proposed 14 days to at least 28. A new 'Refund First' rule means that if you object, the disputed amount can be refunded while HMRC reviews the case. Authorised overdrafts for individuals and tax credits debts are excluded, the power will at first apply only to current accounts, and a joint account will be used only where no suitable sole account exists, with notice and a right to object for the other holder. Each case gets an affordability assessment, possibly using credit reference agency data, and anyone known to need extra support is referred to an HMRC officer for manual review. Unlike DRD, there is no guaranteed minimum balance: the government said it does not currently think one is necessary, though a balance check may be added. People can object, use HMRC's complaints process and appeal to an independent tribunal or other external body. A draft Code of Practice and draft legislation are due in summer 2027, for a later Finance Bill.

Before the Budget, shadow chancellor Andrew Griffith told The Times the plan was "absurd" and said it would let the taxman empty accounts over a few hundred pounds. The Association of Taxation Technicians said HMRC should not take the powers until it can show that adequate safeguards are in place and that the right taxpayers will be targeted. In June, the Low Incomes Tax Reform Group (LITRG) pointed out that the proposals, unlike DRD, include no minimum amount that must stay in the account, a point the final design leaves open. Dan Neidle of Tax Policy Associates called the plan a good idea in principle but doubted that an automated system could tell deliberate non-payment from illness or missed letters. The case for acting rests on the National Audit Office's report of 23 October 2026, which found that 8.2 million taxpayers owed £43.8 billion at the end of 2025-26 (4.7% of receipts). HMRC says around 750,000 debts worth £2 billion come back unpaid each year from the debt collection agencies working for it.

Can HMRC see foreign bank accounts?

Often, yes, though not on demand. Under the Common Reporting Standard (CRS), the OECD's system for automatic exchange of financial account information, tax authorities swap details of accounts held by each other's residents every year. HMRC's International Exchange of Information Manual says 45 jurisdictions signed up in October 2014 to begin exchanges from 2017, and that more than 100 now take part. The list of countries exchanging with the UK for 2026 includes France, Germany, Ireland, Italy, Hong Kong and the Cayman Islands, and added Rwanda, Senegal and Uganda this year. UK banks report under the International Tax Compliance Regulations 2015. The US exchanges with the UK under a separate agreement, FATCA.

What should you do if you owe HMRC?

Every version of the power, current or planned, is aimed at people who do not respond, and anyone who engages with HMRC at any point is taken out of the new process, so the most effective protection is to respond. GOV.UK says that if you cannot pay in full you may be able to set up a monthly payment plan (Time to Pay) online, using your tax reference, UK bank details for a Direct Debit, and your income and spending. HMRC will expect you to use savings first, and it accepts a Standard Financial Statement from an independent debt adviser such as Citizens Advice. HMRC says 9 in 10 Time to Pay plans are completed. Its Extra Support team helps people whose health or circumstances make contact hard, and anyone it identifies as needing extra support is taken out of DRD.

What happens next?

Key dates: 28 October 2026, the Budget confirms the power and HMRC publishes its consultation response; summer 2027, draft Code of Practice and draft legislation; July 2029, first deductions for VAT and PAYE debts; April 2030, Self Assessment and Simple Assessment debts; April 2031, Corporation Tax debts. Until the new law is in force, the existing DRD rules (£1,000 minimum debt, £5,000 left in accounts, face-to-face visit, 30 days to object) still apply. The Budget also adds £70 million over five years for HMRC's partnerships with private debt collection agencies and 670 more compliance officers by 2029–30, and from April 2029 taxpayers will have to set up a Direct Debit for VAT and PAYE return liabilities, subject to exceptions.