HMRC bans personal credit card use for Stamp Duty payments

The European Payment Services Directive 2 (PSD2) hits the statute books this month and the legislation means retailers cannot charge customers fees for payments made by credit card.

An HMRC spokesperson said the new rules won’t allow HMRC to pass on credit card charges as it did before, which meant £3.2m was paid in fees by customers in the 2016/17 tax year.

A spokesman said: It would be unfair to expect other taxpayers to pick up this cost. There are a range of ways for people to pay us depending on the type of tax being paid, including debit cards, direct debit, Faster Payment and BACS.”

HMRC said personal credit cards only account for 0.8% of payments to HMRC by volume and 0.2% by value. In 2016-17 this equated to roughly 400,000 payments.

The ban will affect self-assessment, employers PAYE and National Insurance, VAT, Corporation Tax, Stamp Duty Land Tax, Income Tax and any miscellaneous payments.

Figures obtained by Mortgage Solutions’ sister title revealed that in the 2016/17 tax year, 454,000 credit card payments were made, totalling £741m.

Corporate, business and commercial cards are not affected by this change and HMRC continues to accept personal debit cards. Other payment methods available include Direct Debit, Faster Payment, BACS, debit cards and CHAPS.

HMRC said it will continue to accept personal debit card payments and for anyone struggling to pay, they should contact it directly.

For more see the HMRC website.