HM Revenue & Customs has revealed that the number of people paying their tax bill by credit card increased in 2015/16, ahead of the 13 January 2018 deadline for credit card payments.
The Telegraph sent a freedom of information request to HMRC to get the latest figures for people paying their tax bill by credit card. In 2015/16, 814,261 people paid their tax bill by credit card. This was up from 493,722 credit card payments in 2014/15.
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But from 13 January 2018, 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 tax bill by 31 January 2018.
After 13 January, taxpayers can still use debit cards, direct debit, faster payment and BACS.
Why is HMRC banning credit card payments?
As part of an EU directive aimed at increasing transparency and fairness around consumer payments, the government is introducing a crackdown on merchants charging fees for card payments. From 13 January 2018 the practice will be outlawed, in a move the government says could save consumers around £473 million a year.
This move backfired for HMRC. Because card providers can still charge merchants for accepting card payments, merchants will need to absorb those costs themselves. HMRC says it would have to charge those costs back to taxpayers via the public purse, creating an extra burden for taxpayers – so it is banning credit card payments altogether.
Paying your tax bill by credit card? Now is the time to act
If you are planning on paying your tax bill by credit card, now is the time to complete your tax return and calculate what tax you owe.
Gather your paperwork, log in online using your Government Gateway user ID and password, and file your tax return. Then, remember to pay your tax bill by credit card before 13 January 2018.
If you miss this deadline you’ll need to pay via another method before 31 January 2018 (the overall deadline for filing your tax return and paying your tax bill).
How will a ban on paying your tax bill by credit card affect you? Let us know in the comments below.
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