Paying HMRC by Credit Card

I am thinking about making my July payment on account for my income tax bill on credit card. Are there any problems with that? 

1st June 2016

No, but there are a few things you need to be aware of. As it is for income tax/ self assessment, make sure you use your 10-digit Unique Taxpayer Reference followed by the letter ‘K’ as your payment reference. 

There’s also a fee if you pay HMRC by credit card that isn’t refundable. This applies whatever the tax is that you're paying.

HMRC have changes the fees for using a credit card from 1st April 2016. These replace the former 1.5% fee. The new rates vary depending on the type of card used and whether the card is a personal or corporate card. As you can see, the fees for paying using personal credit cards have been reduced and the rates for corporate credit cards have increased. The new rates are:

Personal credit cards 

Type of card Rate
VISA Personal Credit Card 0.415%
MasterCard Personal Credit Card 0.386%
MasterCard World Premium Credit Card 0.374%
MasterCard Signia Premium Credit Card 0.606%
MasterCard Elite Premium Credit Card 0.606%

 

Corporate credit cards

Type of card Rate
VISA Business Credit Card 1.508%
VISA Corporate Credit Card 1.744%
VISA Purchasing Credit Card 1.755%
MasterCard Business Credit Card 1.973%
MasterCard Corporate Credit Card 2.248%
MasterCard Purchasing Credit Card 2.406%
MasterCard Fleet Credit Card 2.134%

Source http://www.legislation.gov.uk/uksi/2016/333/pdfs/uksi_20160333_en.pdf

Please note that from 1st January 2016, HMRC will limit the number of times you can use a credit or debit card within a certain time to pay your tax.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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