The taxman is to be given sweeping new powers to directly raid people's bank accounts.
John Healey announced the 'draconian' plans in the Budget as he vowed to hire more tax collectors and splurge £70m on "private sector debt collection agencies".
The Chancellor said that, from 2029, HMRC will be able to automatically collect money from individual and company bank accounts when people have "repeatedly" not paid their taxes.
HMRC already has some powers to recover debt from bank accounts, but only in very limited circumstances and following a face-to-face meeting.
The move - which Nigel Farage warned sets a "dark precedent" - will only raise £320 million a year, a fraction of the billions that go unpaid in tax every year.
The Reform UK leader said: "HMRC will now be able to seize money from your bank account without even having a meeting. As someone who's been de-banked, this sets a dark precedent.
"This could be used against anyone deemed to be a threat by the government of the day.
"Reform will fight this at every turn."
John Healey announced the 'draconian' plans in the Budget as he vowed to hire more tax collectors and splurge £70m on "private sector debt collection agencies".
The Chancellor said that, from 2029, HMRC will be able to automatically collect money from individual and company bank accounts when people have "repeatedly" not paid their taxes.
HMRC already has some powers to recover debt from bank accounts, but only in very limited circumstances and following a face-to-face meeting.
The move - which Nigel Farage warned sets a "dark precedent" - will only raise £320 million a year, a fraction of the billions that go unpaid in tax every year.
The Reform UK leader said: "HMRC will now be able to seize money from your bank account without even having a meeting. As someone who's been de-banked, this sets a dark precedent.
"This could be used against anyone deemed to be a threat by the government of the day.
"Reform will fight this at every turn."
A Reform UK spokesman slammed the proposals and warned once HMRC started collecting tax direct from people's accounts, it would be hard to stop.
He added: "This is a draconian and dystopian power grab by the Government. Once they have the power to take money from accounts, they will inevitably expand the use cases.
"HMRC is a badly organised part of the Government and has notoriously bad customer service, with complaints at a five year high.
"It cannot be trusted to implement a system which will automatically deduct funds from individuals’ bank accounts.
"The impact of this policy on ordinary taxpayers will be severe. Taxpayers who have
not done anything wrong, and who do not actually owe HMRC money, could see
funds withdrawn from their bank accounts."
He added: "This automated system will not take account of difficult and unavoidable life circumstances, such as serious illness or family crisis, which the existing system can. This will lead to family breakdown, homelessness and suicides.
"It would then be left to ordinary people to claw the money back via the same contact system that let them down in the first place. It is difficult for working people to get in touch with HMRC. They do not offer an email address. Their income tax phone lines are only open 8am-6pm on weekdays.
"Once this tool has been created, the Treasury will have a strong incentive to deploy it for other taxpayers.
"HMRC could debit every individual for the tax they’re owed, causing further frustration for the self-employed.
"They could also deploy it against specific individuals at their own discretion."
He added: "This is a draconian and dystopian power grab by the Government. Once they have the power to take money from accounts, they will inevitably expand the use cases.
"HMRC is a badly organised part of the Government and has notoriously bad customer service, with complaints at a five year high.
"It cannot be trusted to implement a system which will automatically deduct funds from individuals’ bank accounts.
"The impact of this policy on ordinary taxpayers will be severe. Taxpayers who have
not done anything wrong, and who do not actually owe HMRC money, could see
funds withdrawn from their bank accounts."
He added: "This automated system will not take account of difficult and unavoidable life circumstances, such as serious illness or family crisis, which the existing system can. This will lead to family breakdown, homelessness and suicides.
"It would then be left to ordinary people to claw the money back via the same contact system that let them down in the first place. It is difficult for working people to get in touch with HMRC. They do not offer an email address. Their income tax phone lines are only open 8am-6pm on weekdays.
"Once this tool has been created, the Treasury will have a strong incentive to deploy it for other taxpayers.
"HMRC could debit every individual for the tax they’re owed, causing further frustration for the self-employed.
"They could also deploy it against specific individuals at their own discretion."
The Budget documents make clear that ministers want HMRC to directly raid the bank accounts of people who "repeatedly fail" to pay their tax.
The official Budget 2026 papers say: "The Government will introduce a new power enabling HMRC to recover lower value tax debts through regular instalments directly from the bank accounts of individuals and companies who can afford to pay but repeatedly fail to do so from July 2029.
"The Government will work with stakeholders to develop a Code of Practice setting out the safeguards and operational framework for the policy before being introduced to legislation in a future Finance Bill."
They also reveal that Healey will hand HMRC an extra £70 million over the next five years so "private sector debt collection agencies" can collect more tax debt while simultaneously hiring 670 more HMRC compliance officers.
James Heale, the Deputy Political Editor for The Spectator, said: "I think this is something that the Treasury has been trying to do for a long, long time.
"HMRC makes so many mistakes. We may start hearing about little old ladies who have had money taken from their bank accounts, only to have to fight to get it back a year later."
The official Budget 2026 papers say: "The Government will introduce a new power enabling HMRC to recover lower value tax debts through regular instalments directly from the bank accounts of individuals and companies who can afford to pay but repeatedly fail to do so from July 2029.
"The Government will work with stakeholders to develop a Code of Practice setting out the safeguards and operational framework for the policy before being introduced to legislation in a future Finance Bill."
They also reveal that Healey will hand HMRC an extra £70 million over the next five years so "private sector debt collection agencies" can collect more tax debt while simultaneously hiring 670 more HMRC compliance officers.
James Heale, the Deputy Political Editor for The Spectator, said: "I think this is something that the Treasury has been trying to do for a long, long time.
"HMRC makes so many mistakes. We may start hearing about little old ladies who have had money taken from their bank accounts, only to have to fight to get it back a year later."
