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Markel Tax

12 Jan 2018

Last day to pay tax bill by personal credit card

From tomorrow HMRC will no longer accept payment of tax bills by personal credit card. With the 31 January 2018 and the settlement of 2016/17 tax liabilities edging ever closer, the credit card ban is likely to present a significant cashflow problem to many self-employed individuals.

In the last financial year alone there were 454,000 personal credit card tax payments worth a total of 741m.


HMRC has said ‘We will no longer be accepting credit card payments from 13 January as new rules mean that we can no longer pass on what our bank charge for processing a personal credit card payment. 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.’

The option of paying a tax bill at the Post Office has also closed. The service was withdrawn last month.

What are the remaining alternatives?

Cheque

The cheque should be made payable to ‘HM Revenue & Customs only’ followed by the Unique Taxpayer Reference (UTR) number and posted to: HMRC, Direct, BX5 5BD. A paying in slip should be included with the cheque. If a paying in slip has not been received, a slip can be printed here.

Three working days should be allowed for payment to reach HMRC.

Faster Payments/CHAPS/BACS

Payment by Faster Payments (online or telephone banking) usually reach HMRC the same or next day, while CHAPS payments typically get to HMRC on the same working day. BACS payments can take three days.
A K needs to be added at the end of the UTR to create a payment reference number and payment made to one of the HMRC accounts.
 
 Sort code  Account number  Account name
 08 32 10  12001039  HMRC Cumbernauld
 08 32 10  12001020  HMRC Shipley

If in doubt, use the HMRC Cumbernauld account.

Direct Debit

Setting up a direct debit is straightforward and the process can be found on GOV.UK here.
Again a payment reference number will need to be created as before, taking the UTR and adding a K at the end.

Budget payment plan

Ideally an approach for time to pay should be made to HMRC before the tax liability becomes due and an instalment arrangement agreed.

Before contacting HMRC to request time to pay, it is important to have income and expenditure details to hand, along with information concerning any redeemable assets such as premium bonds or ISAs.
Further guidance is available on GOV.UK here.

 
Here to help
With more than 75 highly skilled tax and funding specialists, advising on over 2,000 complex tax issues each year, we work with your practice to provide up to date, practical solutions. If you have a client in a similar situation, or have a tax question of your own, we're here to help on 0345 223 2727. Or to find out more about our services, email taxmarketinguk@markel.com.
Tagged HMRC
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