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Business Tax  •  Personal tax  •  Tax Planning  •  Taxation

Got outstanding tax to pay when you file your 2016-17 tax return?

By RJP LLP on 18 January, 2018

New rules came into operation at HMRC from 13th January, just in time for the influx of annual self-assessment tax payments.

It has previously been possible to pay your personal tax bill using a credit card, but this option is no longer available. The change has come as a result of a ban introduced by the Government on credit and debit surcharges in the UK. Whilst this means that retailers are no longer allowed to charge customers for using credit or debit cards when they make a purchase, it also means that HMRC no longer has the ability to pass on the charges it incurs for processing card payments. According to the Financial Times, HMRC claimed around £3.2 million in bank fees last year, with over £741 million worth of tax liabilities funded with ‘plastic’.

In anticipation of this change, an estimated 800,000 people have paid their tax bills early using personal credit cards, according to The Daily Telegraph, although HMRC has said that this only represents 0.8% of all payments due. Some taxpayers are arguing that they have had very little warning of the change and are unable to make full payment without the option of using credit.

It is expected that this change will be felt most deeply by the huge number of UK taxpayers who are self-employed or who have large, profitable rental property portfolios. Many of these individuals have traditionally relied on making credit card payments to spread the cost of large tax bills just after the Christmas period.

This week, HMRC was reported in the FT as saying: “As a publicly funded body we are unable to absorb the cost of personal credit card fees because this would ultimately mean charging fees back to customers through the public purse.”

It is possible to discuss staged payment options with HMRC once your tax return has been filed and this can be done either with the support of your accountant, or directly; some taxpayers may have the ability to spread their payments over a few monthly instalments made by direct debit.

HMRC has recommended that taxpayers settle their liabilities using either direct debit, online via a bank transfer or through telephone banking.

If you would like to discuss your tax liabilities further please contact us at partners@rjp.co.uk.

 

 

 

 

 

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There are many benefits to asking your accountant to handle probate

Did you know RJP LLP are licensed by the ICAEW to offer a full probate service.

This can save you time and money, plus we can advise on matters related to inheritance tax at the same time.