HMRC has announced that as of the 13th of January 2018, it will no longer be accepting credit cards to pay tax bills.
The news comes shortly after the government has announced that as of January 2018, companies will no longer be able to charge consumers for paying by credit card. The legislation has been introduced in a bid to abolish a ‘rip-off’ practice which is costing Brits millions of pounds a year.
HMRC argues that this has forced them to stop accepting credit cards to pay tax bills because:
“We are unable to absorb the cost of credit card fees as this would mean charging costs back to customers via the ‘public purse’, therefore creating a burden for taxpayers.”
According to data collected by Telegraph Money, HMRC has charged a whopping £50 million in credit card fees over the last five years.
While HMRC claims their hand has been forced in the matter, consumer groups have warned that this is likely to set a dangerous precedent for other councils and government departments. Unfortunately, it’s also likely to hit companies struggling with cashflow issues hard as they will no longer be able to use credit to pay for income tax, PAYE, VAT and a number of other taxes.
The Director or Fairer Finance, James Daley commented:
“This is a very un-consumer friendly move by HMRC which restricts consumer choice. This is not what the government intended to happen as a result of its fees crackdown. It will be a blow to people who want to spread out the cost of paying their tax bill by putting it on credit card and could force some people to take out loans.”