Self assessment credit card ban

Dec 7, 2017


By Lyndsey Hall



From 13th January 2018, it will no longer be possible to settle a self-assessment bill with a personal credit card.



The government has moved to ban credit and debit card surcharges in the UK from January, as a result of EU directive PSDII, which bans surcharges on Visa and Mastercard payments. Retailers and traders, including HMRC, will no longer be able to pass on charges to users for spending on credit or debit cards. In response to this, HMRC has banned personal credit card payments entirely for self-assessment bills, meaning taxpayers will now have to use a business credit card, or else pay by bank transfer or debit card.


In 2016, Telegraph Money discovered that HMRC charged taxpayers £50m to pay their taxes by credit card between 2010 and 2015. The Freedom of Information request revealed that almost 500,000 payments were made to HMRC by credit card in 2014/15, resulting in more than £12m in commission for the Revenue.


A spokesperson for HMRC said, “We will no longer be accepting personal credit card payments from 13th January as new rules mean that we can no longer pass on our bank charge for processing a credit card payment. It would be unfair to expect other taxpayers to pick up this cost. There are a range of ways for people to pay us depending on the type of tax being paid, including debit cards, Direct Debit, Faster Payment and BACS.”


This announcement has understandably caused concern amongst the freelance community, with many worried that the new rule will result in cash-strapped businesses being put under further strain. Paul Phipps, director of Curtis Recruitment said that while paying a tax bill by personal credit card is always a last resort, taking the option away could prove “seriously detrimental” to small business and sole traders especially.


“It could mean the difference between survival and going bust. In an attempt to protect consumers against unfair credit card usage fees, the PSDII has indirectly removed an emergency payment facility that some struggling businesses rely upon and whichever way you look at it, this is not good for the UK.”


In addition, as of December 15th 2017 it will no longer be possible to pay your self-assessment tax return via the Post Office. Previously, it was possible to pay up to £10,000 through the Post Office, but this has also ended as a result of the governments move to digitalise and modernise the tax system.


What are your thoughts on the credit card ban? Will the new rules effect how you manage your business’s cash flow? Leave a comment or join the conversation on Twitter.


Related articles:

The cost of protecting what matters

Freelancing rises amongst over 50s

PCG becomes IPSE



Other posts you might like:

Get a helping hand for your business.