Consultation on tackling lower value tax debts opens

HM Revenue & Customs published a consultation on 23 June 2026 on proposals to extend its existing powers to enforce lower value tax debts through directly deducted monthly instalments¹. The consultation opened at 9:30am on 23 June 2026 and runs until 11:59pm on 28 August 2026¹.

The proposal covers recovery of lower value tax debts through direct monthly deductions from customers who "persistently do not engage with HMRC", with safeguards for individuals including those who require extra support¹. The consultation seeks views on the policy's scope, operation and proposed safeguards, as well as its impacts and how to ensure it is fair and effective¹.

The consultation page carries the status "Closed consultation" and states that HMRC is analysing feedback, with the outcome to be published on the page¹. A document titled "Proposals to tackle lower value tax debts" is published alongside it¹.

The sources do not state the value threshold at which a debt would count as lower value, the rate or size of any monthly deduction, which taxes the extended powers would cover, or what the safeguards would consist of. Those details have not been reported in the material published on 23 June 2026¹.

Why it matters for households

The consultation concerns people who owe tax and have not engaged with HMRC, and who would have money deducted directly from their income each month rather than paying through another arrangement. It applies to lower value debts, though the sources do not define that term¹.

Anyone affected would see a set monthly amount taken directly, rather than dealing with the debt through the usual routes for owing money to HMRC. The consultation document refers to safeguards for individuals, including those who require extra support, but does not set out what those safeguards are¹.

Because the consultation is about extending existing powers rather than creating new ones, the practical change for households would be in which debts and which people the deduction powers reach. The sources do not say when any extension would take effect, or whether it would apply to existing debts or only to new ones¹.

The outcome is relevant to anyone with an unresolved tax debt, and to households where a tax debt sits alongside other borrowing, including joint debts, since a direct deduction reduces the income available for other commitments. No figures on the number of people who might be affected have been published¹.

What happens next

The consultation closed at 11:59pm on 28 August 2026¹. HMRC says it is analysing the feedback and that the outcome will be available to download from the consultation page¹. No date for publication of the outcome, and no date for any change in the rules, has been reported¹.