Which HMRC debts are eligible
Self Assessment tax debt (income tax and Class 4 NI).
PAYE debt where you owe as an individual (unusual — usually the employer owes PAYE).
VAT debt where you owe as a sole trader.
Working Tax Credit and Child Tax Credit overpayments (legacy debts).
National Insurance debt.
Corporation Tax cannot be included in a personal DRO (it is a company debt).
The DRO effect
Once the DRO is granted, HMRC cannot pursue the included debts during the 12-month moratorium. They are written off on discharge.
HMRC treats DROs like any other creditor situation — they must comply with the moratorium and cannot use enforcement powers like DRD or Field Force visits for included debts.
Ongoing tax obligations
Current-year tax liabilities are not included in the DRO. You must continue to pay current tax as it falls due.
This applies to Self Assessment for the current year, VAT registrations, and any other ongoing tax matters.
Working Tax Credit overpayments
These are common in DRO cases. They are treated as unsecured debts and can be included.
DWP can sometimes continue recovery from ongoing benefit payments — the interaction between benefit debt recovery and DRO is complex and worth reviewing with an Authorised Intermediary.