Labour is to let HMRC raid bank accounts over unpaid tax of just a FEW POUNDS without a court order

The announcement is expected to come from Chancellor John Healey at Wednesday's Budget, with the government seeking to claw back £4billion. Current rules allow HMRC to seize funds only where the debtor's balance exceeds £1,000 and at least £5,000 remains in the account afterwards. Some 4.8 million individuals and businesses each carry outstanding balances below £10,000, and the average personal bill comes to just £950. Credit reference agencies may also be enlisted to help the taxman gauge each debtor's ability to pay.

Officials would also be able to grab outstanding fines and interest on top of the tax owed.

Taxpayers would have to challenge any deduction they believe is wrong themselves.

Tax expert Dan Neidle warned that automated systems could hit people with genuine difficulties as well as deliberate non-payers.