Bad news if you were intending to pay off your Self Assessment tax bill with a personal credit card – this will no longer be an option as of 13th January 2018. HMRC is no longer able to pass on the bank charges for processing credit card payments.
This is because the EU legislation which comes into effect on this date prohibits merchants (including HMRC) from recharging associated fees back to customers.
So, while the silver lining is that moving forward you’ll be able to enjoy toll-free use of your cards when making purchases in shops – you won’t be able to use a credit card to settle your Self Assessment bill.
Will debit cards be affected?
Despite criticism regarding the lack of notice, written warnings from HMRC were sent out alongside tax bills in late December 2017 declaring:
“From 13 January 2018 HMRC will no longer be accepting payments made from personal credit cards… Corporate, business and commercial credit cards are not affected by this change and HMRC will continue to accept personal and commercial debit cards.”
While personal credit cards reportedly only accounted for 0.8% of payments to HMRC in 2016/17, this could be a troublesome announcement for those relying on borrowed money to make their payment.
What should I do if I was planning to pay by credit card?
If you don’t have the cash to pay, file the Self Assessment ASAP and contact HMRC about setting up a payment plan.