When making tax payments to HMRC, you are currently only charged a fee if you pay by business credit card, while payments by personal credit card are not permitted. However, from 1 November 2020, payments made using a business debit card will also attract a fee.
The rationale behind the change is to avoid any cost to the public purse, so business debit card users will be charged a fee equal to the total cost incurred by HMRC when receiving the card payment.
Alternatives
HMRC accepts a wide range of alternatives which will not incur charges for the taxpayer, including:
- Online banking – Quick and easy to set up, with the advantage that details are saved for the future, with Faster Payments normally being immediate. You can also pay with CHAPS or Bacs or use telephone banking.
- At your bank or building society – This method is only an option if you still receive paper statements from HMRC and also have the paying-in slip HMRC sent you (printing one is not an option).
- Direct debit – Set up is via your HMRC online account, this is not quite as convenient as online banking, with payments normally taking longer to process. You need to plan ahead if paying by direct debit. HMRC says to allow five working days to process a Direct Debit the first time one is set up, and three working days the next time if you’re using the same bank details.
- By cheque through the post – You can print a payslip to use if HMRC has not sent you one. Allow three working days for the payment to reach HMRC, with an obvious delay if the cheque is not completed correctly.
The fee-change is only to business debit cards, so payments made using a personal debit card can continue to be made to HMRC free of any charges.
HMRC has online guidance on paying your taxes.
West London
3 Brook Business Centre,
Cowley Mill Road,
Uxbridge, UB8 2FX
East London
London, E11 1GA
South London
London Bridge
73–81 Southwark Bridge Road,
London, SE1 0NQ
City London
London, EC2M 1JH
We believe we are more than just your average accountancy firm. Our goal at Barnes Roffe is to engage our clients through a proactive relationship, which provides you with the resources and tools you need to enable you to take charge of your finances with confidence.
Tax news, audit news and any new accounting news ... with the help of our topical tips, blogs and key guides you can enjoy the benefit of being regularly informed of business and accounting updates which are likely to be relevant to you and your business.
PLEASE NOTE: By the very nature of this type of information the details of tax law might have changed since they were published, so contact your Barnes Roffe partner before acting on any matter contained in these documents.