HMRC is to be handed powers to take money straight from tax dodgers' bank accounts in Healey's Budget

Shadow chancellor Andrew Griffith branded the plan 'absurd', warning the taxman could 'empty your bank account over a few hundred pounds and leave you with nothing to pay the rent'. Chancellor John Healey is expected to unveil it at Wednesday's Budget. At present HMRC can only act on debts above £1,000, and must leave at least £5,000 behind. No court order would be needed under the new rules.

Around 4.8 million people and firms owe under £10,000, with individuals averaging £950.

Fines and interest could also be swept up in the deductions.

Dan Neidle of Tax Policy Associates warned automated systems may punish genuine hardship.