Do credit card companies accept tax payments?

 Do credit card companies accept tax payments?

After you've filed your taxes, you may intend to pay any outstanding balances with your personal credit card, and you may have done so in the past. However, in 2018, HMRC stopped taking payments by personal credit card. So, what are your next steps?

Why can't you use a personal credit card to pay your taxes?

As part of an EU directive, the UK government implemented a crackdown on merchants charging fees for card payments in 2018. The government claimed at the time that this would save customers £473 million a year, however it caused a problem for HMRC. Because card companies can still tax retailers for taking card payments, businesses, including HMRC, must bear those charges. Rather than collecting such fees back to taxpayers through the public purse, it decided to outright prohibit personal credit card purchases.

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Using a credit card to pay HMRC

You can still use a corporate credit card to pay several taxes, including Self-Assessment taxes, employers' PAYE and national insurance, VAT, Corporation Tax, and even Stamp Duty Land Tax.

When it comes to paying by credit card, there will be fees associated with this, which will be set by the supplier. Paying with a corporate credit card is as simple as logging into your tax account online and inputting the necessary information.

What other options do I have for paying my tax bill?

In addition to a corporate credit card, you can pay your tax bill with a corporate debit card (for a fee) or a personal debit card (for which there will be no charge). These payments should be processed the same day or the next. Again, the simplest way to pay using any of these options is to go to the HMRC website, select the tax you want to pay, and sign into your online tax account or provide the applicable reference number.

Other choices differ depending on the tax, but direct debit, at your bank, via BACS/CHAPS, telephone banking, and even by cheque through the mail are all viable options. To complete the transaction, you'll need your UTR, reference number, or payslip information.

When using direct debit, you must create a single payment each time you want to pay. This can be done through your Government Gateway account. Allow five working days to complete your initial direct debit, and three working days for each subsequent one if you use the same bank details. BACS payments, like sending a cheque, can take up to three business days.

If you wish to pay by cheque, send it to HMRC Direct BX5 5BD - no street name, city name, or PO box is required with this address. Make your cheque payable to 'HM Revenue and Customs only,' and write your 11-character payment reference on the back of the cheque for self-assessment payments. Your 10-digit Unique Taxpayer Reference (UTR) is followed by the letter 'K.' This will be on your pay stub. Include the payslip HMRC sent you (if you still receive paper statements), but do not fold or tie the payslip or cheque together.

Should you pay HMRC with a credit card?

Tax payments on your company credit card can be enticing, especially if you are struggling to meet your responsibilities. If you do this, you must ensure that you can afford the repayments, including any interest charges. If you are having difficulty paying, you should contact HMRC and request a payment plan, or you can have your accountant do so on your behalf. Remember that you can pay your self-assessment fee in weekly or monthly instalments to avoid having to pay a lump sum.

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