HMRC to stop accepting personal credit cards

HMRC has confirmed that they will no longer accept payments with a personal credit card from 13 January 2018. This includes payments for income tax, PAYE, VAT and many other taxes. This is due to the implementation of the EU second Payment Services Directive (PSDII). This legislation makes a number of reforms to the way payments by, debit and credit cards, direct debit, credit transfers, standing orders and other digital payments are made.

One of the main changes as a result of this new legislation will be the removal of extra charges for making payments by credit cards. This practice known as ‘surcharging’ is common across a wide range of businesses including some local councils and government agencies. These changes will bring an end to this practice and force companies to choose between absorbing the costs associated with accepting credit card payments or to stop accepting credit cards.

Currently, the lowest fees are for making payments to HMRC are by using a personal Visa or MasterCard credit cards.

Planning note

HMRC will continue to accept payments by debit card or corporate credit cards as well as all other payment methods. Payments by corporate credit cards will continue to be accepted with fees of at least 1.5% depending on the type of card used. HMRC is also removing the option of making a payment through a Post Office from 15 December 2017.

Posted in General

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