The Practical Guide to Limited Company Tax
If you have chosen to operate your business as a limited com...
By Dave Allworthy on 12th January 2018
From 13th January 2018, HMRC will no longer accept payments from personal credit cards.
The move comes just a fortnight before this year’s self-assessment tax return deadline and is likely to cause problems for some of the 11 million people aiming to complete their annual tax return by 31st January.
HMRC say their hand has been forced by imminent EU rules banning all merchants (HMRC included) from passing on bank processing charges to payers.
HMRC has been charging up to 0.6% to taxpayers using their personal credit card to settle their tax bills and in 2016-17 passed on about £3 million in bank credit card charges. Their stance is that the cost of absorbing these fees would be detrimental to service levels and would leave taxpayers worse off.
A spokesman for HMRC said: “New rules mean that we can no longer pass on what our bank charges for processing a credit card payment. It would be unfair to expect other taxpayers to pick up this cost”.
With 454,000 people using their personal credit card to settle their self-assessment bill in 2016-17, the announcement from HMRC to ban this payment method has been blasted by critics.
Andrew Snowdon, partner at the accounting group UHY Hacker Young, said:
“It beggars belief that HMRC would take such a customer-unfriendly approach – using a credit card may be the only way some taxpayers can afford to pay their tax bills. The ban comes at a tough time in the economy and is insensitive to say the least. Instead of finding a way to implement the new rules, HMRC has simply dropped a mainstream payment method.”
The Low Incomes Tax Reform Group (LITRG) also expressed concern that some people would struggle to pay their tax on time and could resort to taking out high-interest loans in order to meet HMRC’s payment deadline.
Chairwoman of the LITRG, Anne Fairpo, said:
“Making payments may not be straightforward for some taxpayers and we are keen to see that these changes are publicised as widely as possible. If making the tax payment will cause hardship, we strongly recommend people contact HMRC as soon as possible, and certainly before the due date of payment, to discuss their case.”
HMRC has confirmed that corporate, business and commercial credit cards are still allowed and that payment can also be made by BACS, CHAPS or Faster Payments, or by setting up a direct debit.
Employed taxpayers, with a tax bills of less than £3,000 can pay HMRC through PAYE, but only if they submitted their tax return online by 30th December.
Click here for information on how to pay HMRC
There are just a few weeks to go to the self-assessment deadline of 31st January.
If you have still not filed your self-assessment tax return for the 2016-17 tax year, and are worried about dealing with it, we can help, even if you are not currently a Boox client.
(Please note you will have to send us the necessary information and payment by 20th January in order to guarantee completion by HMRC’s deadline.)
Just click on the link below to get started.
Our handy guide to claiming expenses through your limited company looks at what you can and can’t claim tax relief on through your company
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