HM Revenue & Customs is set to reinforce its snooping powers and raid bank accounts to collect lower amounts of tax debt than was previously possible.

Currently the tax office can take money directly from the bank accounts of those who owe more than £1,000, under powers brought in a decade ago. 

But the powers currently only allow HMRC to recover the money if the person would still have more than £5,000 in their account after the debt has been taken. 

New proposals by the tax office, if approved, would allow it to take 'lower value debts' in instalments directly from people's bank accounts, with no £5,000 buffer. 

When contacted by This is Money, the Treasury did not confirm how much lower the threshold could be. It said this would be part of the consultation on the policy.

Dan Tomlinson, 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.

'These extended powers would ensure fairness for all taxpayers, while support will continue to be offered to those wanting help with their payments.' 

But Rachael Griffin, tax and financial planning expert at Quilter called the removal of the buffer a 'notable concern'. 

She said: 'Even relatively modest deductions could disrupt essential spending for households on tight budgets, particularly if liabilities are disputed or incorrectly assessed. 

'Ensuring robust checks and clear protections for vulnerable individuals will be critical.'

The consultation on the proposal, which was launched on Tuesday, aims to collect tax debt from those who can 'afford to pay but refuse to do so'. 

HMRC said that 'robust safeguards' would be in place to protect financially vulnerable people and that the consultation would define what 'low-value' debt it should collect. 

It said it would only use the powers when it has tried to contact people about their debt at least 10 times.  

Up to 250,000 taxpayers owing £5,000 or less could have their bank accounts raided under the plans, according to the Telegraph. 

Tax experts have warned that small debts can often arise from error and misunderstanding rather than deliberate avoidance. 

'In that context, automatically recovering funds from bank accounts, especially without a minimum balance protection, could leave some taxpayers facing genuine financial strain,' said Griffin. 

Danni Hewson, head of financial analysis at AJ Bell, said: 'The new rules would allow the tax office to potentially claw back around £2 billion a year from people with debt under £1,000.

'Even if a person files a complaint which is ultimately upheld, HMRC could continue to take payments whilst the complaint is considered. 

'These debts might be ‘lower value’, but they could represent a huge challenge for the people who owe them, and there is the potential that dipping directly into a person’s bank account could push vulnerable people deeper into debt.'

The consultation is the latest attempt by HMRC to close the tax gap - the difference between how much tax should be paid to the tax office and how much it gets. 

This gap was worth around £60billion in 2024 to 2025 - up from £46.8billion the previous year.