From the 13th January 2018 you will no longer be able to pay your self-assessment tax return with a personal credit card. The payment will be rejected after this date and instead will need to be made with a business credit card or another of the available methods.
The HMRC has said
"We will no longer be accepting credit card payments from 13th January as new rules mean that we can no longer pass on what our bank charges for processing a credit card payment."
Statistics, which were obtained from a Freedom of Information request by Telegraph Money, has shown that 500,000 credit card payments were made to the HMRC during the 2014-2015 tax year. But why would people choose to pay by credit card when they are charged between 0.3pc and 0.6pc? It is often a last resort for small businesses and sole traders who are have to pay a whole years tax bill in one go. This could make the difference between an SME scraping through or having to close. However according to James Daley of Fairer Finance, some people pay by credit card in order to take advantage of rewards
"It can make sense if you pay by credit card and then clear the balance by the end of the interest-free period - you are probably going to make the fee back in rewards."
In addition to the ban on credit cards, from the 15th December 2017 you will no longer be able to make payments at your Post Office.
How can I pay?
The available methods to pay your tax bill are as follows:
- Business credit card
- Debit Card
- Bank transfer using Faster Payments, CHAPS or Bacs
- At your bank or building society with cash or cheque
- By direct debit
- Budget payment plan
- By cheque through the post
- Through your tax code
What should I do if I was relying on paying my tax bill by personal credit card?
Talk to Incisive. We will do whatever we can to advise you on your best course of action.