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Creditfix LB 03-2017

More Consumers Paying Tax with Credit Cards

More people than ever before in the UK have paid their tax bill by credit card, with the number topping 800,000 for the first time.

The figures, published by the Telegraph following a Freedom of Information request, show that 814,261 credit card payments were made to HM Revenue & Customs (HMRC) in 2015-16.

This represents a huge increase from the previous tax year 2014-15 where only 493,722 payments for tax were made by credit card.

?13.2 million in card fees were paid by the taxpayers in order to use their credit cards to pay tax during 2015-16. This brings the total charged by HMRC for card use to more than ?63 million over the past six years.

HMRC initially raised its charges for paying by credit card from 1.4 per cent to 1.5 per cent, before reducing them again last year to 0.6 per cent or lower, depending on the card being used.

A spokesman for HMRC said: ‘The card fees charged to customers cover the costs imposed by credit card companies and our merchant acquirer for processing these payments.

‘These fees also ensure that customers who choose to pay by another method do not cross-subsidise the cost to public funds of those who choose to pay by credit card.’

The news comes after HMRC announced recently that they will no longer accept credit card payments to settle tax bills from 13 January 2018. The deadline for self-assessment payers for the tax year ending April 2017 is 31 January 2018.

The decision has come after the crackdown by the government on credit card payment fees. HMRC have said that it is not possible to absorb the cost of credit card fees, and it would therefore create a burden for taxpayers.

Taxpayer will still be able to use debit cards, direct debit, faster payment and BACS after the cut off dates.

People who wish to use a credit card to pay their current tax bill have little time left in which to do so.

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