Credit Cards & Loans
Last chance to pay your tax bill by credit card
Guest Author:
Paloma KubiakAnyone planning to pay their tax bill by credit card will need to do so tonight as HM Revenue & Customs won’t accept this payment method from Saturday 13 January (tomorrow).
Retailers charge up to 5% for paying with a credit card rather than a debit card or cash.
But these controversial fees – passed to consumers – are to be banned from Saturday 13 January 2018 as part of EU legislation coming into effect.
The move to end ‘rip-off’ credit card surcharges, first announced by the Treasury in the summer of 2017, was expected to lead to savings for consumers.
However, it may have backfired for those with big tax bills to pay. HM Revenue & Customs (HMRC) will no longer accept personal credit card payments on a number of services, including:
- Self-assessment
- VAT
- Stamp duty
- Income tax (because you previously underpaid)
- Employers’ PAYE and National Insurance
- Corporation tax
- Miscellaneous payments (if reference begins with ‘X’).
Corporate, business and commercial credit card payments aren’t affected by the new payments directive.
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Figures obtained by YourMoney.com revealed that in the 2016/17 tax year, 454,000 credit card payments were made, totalling £741m, resulting in £3.2m in personal credit card fees.
The new legislation means HMRC is unable to absorb the cost of the credit card fees because it would mean some taxpayers being charged extra for subsiding others.
An HMRC spokesperson, said: “We will no longer accept credit card payments from 13 January as new rules mean that we can no longer pass on what our bank charge for processing a personal credit card payment.
“Like all organisations HMRC has to make difficult choices about how we use our resources and ensure that we treat all customers equally. Absorbing these costs would mean that customers paying by other methods would be indirectly subsidising those paying by personal credit card.
“It would be unfair to expect other taxpayers to pick up this cost. There are a range of ways for people to pay us depending on the type of tax being paid, including debit cards, Direct Debit, Faster Payment and BACS.”
HMRC said it will continue to accept personal debit card payments and for anyone struggling to pay, they should contact it directly.
The deadline to submit your 2017/17 tax return and pay any amount due is Wednesday 31 January 2018.