Can HMRC freeze our bank account?

Yes, HMRC has extensive powers to freeze bank accounts, though the specific mechanism and circumstances vary. HMRC cannot unilaterally freeze accounts in the way that happens when a winding-up petition is advertised—that freezing is done by banks themselves as a defensive measure once they see a petition in the Gazette, not by HMRC directly. However, HMRC can obtain court orders to freeze accounts if they believe there's a risk of tax debts going unpaid or assets being dissipated. More commonly, HMRC can issue a 'third party debt order' (previously called a 'garnishee order') which allows them to instruct your bank to freeze funds and pay money directly to HMRC to settle tax debts. This typically happens after HMRC has obtained a County Court Judgment (CCJ) for the debt and you still haven't paid—the court can then order the bank to freeze your account and transfer funds to HMRC. HMRC can also serve a 'notice to deduct' on your bank requiring them to freeze your account if you have unpaid tax debts, though they normally pursue this route only after other enforcement attempts have failed. The most common scenario where company bank accounts get frozen in relation to HMRC is when HMRC files a winding-up petition for unpaid tax and it gets advertised in the Gazette—at this point, banks routinely freeze accounts to protect themselves from potential clawback liability if the company enters liquidation. Once accounts are frozen in response to a winding-up petition, companies often cannot operate at all, which effectively forces them into liquidation even before the court hearing. HMRC can also use their very extensive information-gathering powers to identify all your bank accounts, including personal accounts if they're investigating director liability, so hiding funds in other accounts doesn't work. If you're concerned about HMRC freezing accounts, the situation is already extremely serious and requires immediate action: contact HMRC urgently to negotiate payment arrangements before enforcement escalates; seek insolvency advice about whether formal procedures like CVA or administration might provide protection; and do not attempt to move money around to hide it from HMRC, as this will be viewed as asset dissipation and can result in director disqualification and personal liability. If HMRC has already frozen your accounts, you need emergency legal advice because it likely means either a court order is in place or a winding-up petition has been issued, both of which require immediate professional response. The best way to avoid account freezing is to engage proactively with HMRC before enforcement reaches this stage, demonstrating willingness to pay through realistic time-to-pay proposals backed by evidence of affordability. HMRC would rather receive payment over time than force liquidation where they might recover very little, but they will use their extensive enforcement powers if they believe a company is avoiding payment or has no genuine intention to settle debts.