From 13th January, businesses will no longer be allowed to add a surcharge if a customer decides to pay by credit card.
Although the UK legislation is based on the European Union Payment Services Directive (PSDII), the government has gone further applying the ban to all cards and PayPal rather than limiting it to Visa and Mastercard payments.
However, whilst this should be good news for the consumer, some retailers and businesses plan to sidestep the rules by either increasing the retail price, adding a new service charge or refusing to accept credit card payments at all.
Ironically, one of biggest beneficiary of these charges is the HM Revenue & Customs and they have decided to stop accepting personal credit payments from 13th January.
For individuals looking to spread the cost of the tax due from their personal tax return, the timing is dreadful, coming into effect just a couple of weeks before the 31st January filing deadline.
Although this change, along with the end of the ability to pay by cash or cheque at the Post Office, was announced, it has hardly been given much prominence by HMRC.
A statement has been included with tax statements issued in December under Important Information reading “From 13 January 2018, HMRC will no longer accept payment by personal credit card. Debit cards and corporate credit cards continue to be accepted.”
Given that the government unveiled the change in July last year in a press release “Rip-off card charges to be outlawed”, HMRC should have given tax payers more notice and, thereby, adequate time to make alternative arrangements.
For those taxpayers depending on making their tax payment by credit card, there is still time to submit their tax return and pay the tax due before 13th January. Alternatively, it would be an idea to make an interim estimated payment before the deadline leaving a small amount either to pay or be refunded once the tax return has been submitted.
Thereafter, another payment method will be needed and, for those in severe hardship, there is the opportunity to negotiate a Time To Pay plan with HMRC.
If you would like to arrange an initial consultation to discuss your tax affairs or would like any further information, please email us at tax@cooperfaure.co.uk. |
