As of next Saturday, January 13, HM Revenue and Customs (HMRC) will not accept personal credit cards for many tax payments, including stamp duty.
This is the result of the European Payment Services Department Directive 2, which says that retailers cannot charge fees for payments made by credit cards. As a result, HMRC is unable to pass on the credit card fees charged by credit card companies. Instead of absorbing the charges, HMRC has decided not to accept personal credit cards.
Previously, HMRC charged fees for personal credit card transactions and this cost taxpayers £3.2m in the 2016/2017 tax year.
This change will not affect many people, as only 0.8% of payments to the HMRC and 0.2% of the value came from personal credit cards.
It is unusual for a landlord to pay the 3% stamp duty on buy-to-let properties using their personal credit cards, but landlords and property investors may still be affected by the changes as they are now unable to pay corporation tax, VAT, self-assessment tax and stamp duty land tax on their personal credit cards. Payments can still be made by debit card and bank transfers, and landlords and property investors can continue to use corporate and business cards.
It is possible to pay both private and commercial mortgage repayments using a personal credit card, though advisors would likely recommend against it. If a lender charges a fee for this, they will no longer be able to do so after January 13.
