HMRC will no longer be accepting credit card payments when you pay your self-assessment bill.
From January 13, self-employed, sole traders and company directors will no longer be able to use their own personal credit card to pay their self-assessment tax bills
Under current rules, all taxpayers can pay their HM Revenue & Customs (HMRC) with a personal credit card using either their online account or, if they prefer to receive paper statements they can settle their tax bill using a paying-in slip.
Why is this change being implemented?
From 13 January 2018, retailers and traders will no longer be allowed to charge consumers for paying on plastic when making a purchase, this includes HMRC. Therefore this now affects anyone paying HMRC – something that HM Revenue & Customs have been very quiet about up till now, so this could create a very large and unwanted post- Christmas financial surprise for many people and is not likely to be well received by the UK’s many tax paying individuals! For some, it may be because they actually receive rewards from their credit card providers for others it may be the ease of being able to spread their tax bill over a few months at 0% – whatever the reason, they are now no longer going to be an option.
So what’s the answer?
The first option is a “no-brainer”, simply pay your self-assessment tax bill prior to the deadline date of 13th January, don’t wait till the evening of 31st January to submit your payment (obviously we do not condone this!! We always advise that you are organised and pay your tax well before the end of the year). But this is obviously a short-term solution as it only works for this year.
If you leave it too late and make your self-assessment submission after 13th January 2018, to make the subsequent tax bill payment you will have to use a business credit card (which many people do not have) or choose to pay via bank transfer or debit card.
Frankie Tortora, the founder of freelancing digital magazine Doingitforthekids.net, says she believes that the changes will take many self-employed professionals by surprise.
“My fear is that a lot of people will be panicking come January,” she said.
“As much as we all work hard to ensure we’re on top of our cash flow, freelance life is inherently unpredictable and there will be situations where things just don’t go to plan.
“Removing the option to use a personal credit card will cause a lot of problems for a lot of people and, as far as I can tell, HMRC have made zero effort to communicate this change.”
If you are concerned about this change in policy affecting you, then please do get in touch and we can help you plan your cash flow.