From 13 January 2018 HM Revenue and Customs will no longer accept personal credit card payments for a raft of taxes, including Stamp Duty.
When the European Payment Services Directive 2 (PSD2) comes into force next week no business will be allowed to pass on to customers the 1.5% fees that banks charge to process each credit card payment. Not only does this affect retailers, it also applies to HMRC.
The new legislation, intended to end what have been called “rip-off charges” to customers, is expected to lead to savings for consumers overall. However, those with large bills to pay such as Stamp Duty or personal tax may be caught short by the change, which is due to kick in just two weeks before this year's self-assessment tax deadline.
Until now, HMRC’s acceptance of credit card payments has allowed taxpayers to spread the cost over several months. A total of £3.2m was paid to HMRC to cover credit card fees in the 2016/17 tax year, equating to roughly 450,000 payments.
There remain, however, a number of other ways to pay, depending on the type of tax. Direct debit, Faster Payment, BACS and CHAPS will all continue to be accepted by HMRC.
Corporate, business and commercial cards are not affected by the change and HMRC continues to accept personal debit cards.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
You may also be interested in reading: