Well over 450,000 of us in the UK settle our Self Assessment tax bills with credit card payments each year. Like a of things we stick on those vital little plastic slabs, we pay extra for the convenience. About £12 million extra a year, in fact. Despite the commission HMRC charges, credit cards are still a popular way of spreading tax bills out so they don't break the bank all at once.

However, on January the 13th, HMRC's changing the rules for Self Assessment payments, and your credit's no good any more.

Here's what it means for you:

What's changing?

After the 13th of January 2018, you'll no longer be able to pay your Self Assessment tax bill off using a credit card.

That cut-off point comes less than 3 weeks before the 31st of January deadline for paying.

With well over 10 million people due to submit and pay their Self Assessment on that date, the sudden change is probably going to catch a lot of them out.

Why is this happening?

It all comes down to a new European directive coming in on January the 13th.

From that point, companies will no longer be allowed to charge their customers extra for using Mastercard or Visa credit cards to settle their bills. The government's been calling the move a way of clamping down on “rip-off charges” that have “no place in modern Britain.”

The unexpected up-shot is that HMRC gets lumped in with everyone else on this. It's a tough nut to crack, and the taxman's swinging his sledgehammer full-force at it.

In fact, he's going a step or two beyond by including all credit cards in his ban.

Even digital services like Apple Pay and Paypal will be refused once the cut-off date comes.

The only exceptions seem to be corporate and business credit cards.

How are people reacting?

There's been a range of reactions to the news so far, but most of the louder voices aren't happy.

At face value, it's largely being seen as an “unfriendly” move to make. For many, using a personal credit card is the only way to make paying tax affordable in tough times. For others, the ban may be more of an inconvenience than a major problem.

A few are concerned at the example HMRC are setting here, too. Other companies seeing the taxman dropping credit cards because he can't pass the expense on might get the same idea. Right now, most of them seem to be saying they'll carry on accepting credit cards without the surcharge. Of course, there's still a possibility that they'll find other ways to cover the cost. Some companies, for example, have already started adding a non-specific “service charge” or “admin fee” to their bills.

What do I need to do?

If you were planning on paying your Self Assessment tax on a credit card or PayPal-type service, you've got a decision to make. You can either

  • get your payment in before the cut-off date
  • find another way to pay.

Either way, you'll need to be sure you've got yourself set up for future payments as well.

If you're not sure what your best option is, talk to RIFT. Bumps in the road like this are exactly why we take care of your tax return and tax rebate woes all year round at no extra charge. Call, use the Live Chat below, or email and we'll help sort it all out.