Paying your tax bill by credit card? Now is the time to act!

HMRC has taken a simple approach to the wider ban on businesses/organisations passing on credit card charges. As part of this credit card surcharge lock down HMRC is simply stopping taking them as a blanket ban for tax payers.

From Saturday 13 January 2018, (deadline Friday 12th January) HMRC is banning credit card payments, meaning you need to act quickly if you want to pay your current tax bill by credit card. Self-Assessment taxpayers need to pay their 2016-17 balancing payments tax bill by 31 January 2018. Those without a balancing payment for 2016/17 could still have their first payment on account for 2017/18 to make on that date.

From 13 January, taxpayers can still use debit cards, direct debit, faster payment and BACS.

Why is HMRC banning credit card payments?

The move comes as the UK begins to implement an EU directive aimed at increasing transparency and fairness around consumer payments. The government says this could save consumers about £473 million a year.

Because card providers charge merchants for accepting card payments, merchants will need to absorb those costs themselves. HMRC says it would have to charge this cost back to taxpayers, creating an extra financial burden – so it is banning credit card payments altogether.

How does this affect you?

If you are planning on paying your tax bill by credit card, you now have less than two weeks to do so.

If you know you are going to needed to pay by credit card you may want to make a payment now in anticipation of the due date.

If you miss this deadline you’ll need to pay another method before 31st January 2018.

Are you a business that accepts card payments?

The ban on passing on card charges doesn’t just affect HMRC. If you take card payments in your business then you may also be affected. Fortunately there are now so many ways to take payments with ease that the charges for accepting payments can be reduced by looking around. If you’d like to know your options our Cloud Team is busy helping clients to implement smart payment systems.

Martin Wardle Tax Director tel: 0191 281 8191 Email: