News

**MSE Lawrence** · 11-01-2008, 12:00 PM

This is the discussion to link on the back of Martin's 'Pay tax by credit card: Fantastic news… for some' blog. Please read the blog first, as this discussion follows it.

Read Martin's 'Pay tax by credit card: Fantastic news… for some' Blog.

Click reply to discuss below.

lic · 11-01-2008, 5:17 PM

The revenue might not charge you to pay with a debit card, but its a safe bet they will charge for a credit card payment. They do when you buy you vehicle excise licence with a credit card online.
Don't forget they are there to save themselves money, no you!

jdowland · 14-01-2008, 10:20 AM

The american express card has a maximum cashback of 200 pounds tops for the 5% period, so you wouldn't earn 500 for a 10k tax payment. Also, I'm not sure, but certain types of payments aren't eligible for the cashback, and tax stuff might be in that set. I need to check the T&Cs at some point (plan to either buy a car or a laptop).

oscarhugo · 16-01-2008, 12:14 PM

I also think it's a fair bet that, as well as making a charge for paying by credit card, HM Revenue & Customs [their fancy new name] almost certainly won't accept Amex...

oscarhugo · 16-01-2008, 12:27 PM

Also-also - it's my guess that the Taxman won't charge 'only' 1% for using a credit card; it's more likely to be in the region of 2.5 or 2.75%. But we'll see.

pauldbate · 18-01-2008, 9:46 AM

I've just phoned the Revenue to ask if it possible to pay my tax bill by credit card and they said no.

**MSE Martin** · 18-01-2008, 5:10 PM

Hi Pauldbate

The revenue isn't doing it yet - it'll probably be for next year's tax.

Martin

David Mee · 30-01-2008, 12:46 PM

What about credit card cheques? They should accept these shouldn't they? I have been offered 0% on existing card for purchases and they sent cheques along with letter. Am I right in thinking these will be fee free??

laulau80 · 31-01-2008, 2:14 PM

on collecting mail from our previous address yesterday - my boyfriend found a letter from the HMRC (he told them of our change of address months ago). This informed him that he owes double the amount of tax than he thought - oh dear.
He is unable to pay the full amount of tax and can't pay for it with a credit card. The banks is offering him a loan at a scary 19.8%.
Does anyone have any tips on how to pay this without the huge interst rate? HMRC has extended his payment dealine until monday - how kind!
We'd be eternally gratedul for any help.

rodent · 23-12-2008, 4:41 PM

Spoke to Egg today .....Payment to HMRC is definately classed as a purchase.

Also spoke to HMRC, fees are:
1.25% for internet payment
0.91% if you pay over the phone

also confirmed that agreement has been reached with "most cc providers" that Tx will be treated as a "Purchase" and NOT a cash advance.

Fantastic for stoozers using cashback cards !!

Payment by cc now live and running ....Merry Xmas !!

The Rodent

Airwolf1 · 23-12-2008, 5:25 PM

Quote:

Originally Posted by laulau80

on collecting mail from our previous address yesterday - my boyfriend found a letter from the HMRC (he told them of our change of address months ago). This informed him that he owes double the amount of tax than he thought - oh dear.
He is unable to pay the full amount of tax and can't pay for it with a credit card. The banks is offering him a loan at a scary 19.8%.
Does anyone have any tips on how to pay this without the huge interst rate? HMRC has extended his payment dealine until monday - how kind!
We'd be eternally gratedul for any help.

Ring HMRC up and try to enter into an arrangement, explain the circumstances and see what they say.

lic · 23-12-2008, 6:04 PM

Also spoke to HMRC, fees are:
1.25% for internet payment
0.91% if you pay over the phone

I thought paying for things via the net was normally cheaper than speaking to a human being!

darren72 · 25-01-2009, 3:47 PM

Is anyone able to confirm whether their transactions have gone through as purchases to the HMRC ?

Thanks

NonGeographicalMan · 27-01-2009, 2:29 PM

Quote:

Originally Posted by lic

Also spoke to HMRC, fees are:
1.25% for internet payment
0.91% if you pay over the phone

I thought paying for things via the net was normally cheaper than speaking to a human being!

I spoke to a very abrasive HMRC telephone payments line girl today who told me that my credit card card issuer would be charging me 0.91% for the credit card transaction if made on the phone. She had no clue whatsoever about online payment arrangements and said it was nothing to do with her (i.e. totally disinterested in the customer and their choices for making payment).

I told her this was impossible as it was either a normal merchant payment transaction attracting no fee from my card issuer or a cash transaction that attracted fees that they, HMRC, would not be in a position to know and would vary by card issuer. This bored, arrogant, sulky, around 25 year old female did not want to know about the facts though. Eventually I spoke to her supervisor (older and thick but quite nice) and he said the actual official training to his section was that card issuer was charging the customer the 0.91% (typical HMRC Board slight of hand like their corporate lie that their 0845 phone numbers are "local rate") but he agreed that the sum would actually be added to the amount debited in HMRC's name.

So in reality HMRC is charging 0.91% for credit card payments on the phone but trying to make it seem like your card issuer is charging it directly (rather than HMRC recouping its costs on the amount you are billed by them as is actually happening). As both my Shell Mastercard and Egg Money cards only pay 1% cash back it scarcely seems worth it as 0.09% of £7,000 is only £6.30 and I'm concerned my card issuer might decide it is not a merchant transaction but a cash transaction at the end of the day. Also I would only be able to pay about £6,000 using these two cards given my current credit limits on them combined.

Why would they be charging 1.25% for online payment. Madness when you consider the time of the staff who take the manual payments. If they can do 0.91% on the phone it ought to be 0.75% online. Something wrong somewhere.

teddie2003 · 27-01-2009, 10:15 PM

Quote:

Originally Posted by rodent

Spoke to Egg today .....Payment to HMRC is definately classed as a purchase.

Also spoke to HMRC, fees are:
1.25% for internet payment
0.91% if you pay over the phone

also confirmed that agreement has been reached with "most cc providers" that Tx will be treated as a "Purchase" and NOT a cash advance.

Fantastic for stoozers using cashback cards !!

Payment by cc now live and running ....Merry Xmas !!

The Rodent

Does anybody know who the "most CC providers" are that will treat it as a purchase rather than a cash advance?

NonGeographicalMan · 27-01-2009, 11:00 PM

Quote:

Originally Posted by teddie2003

Does anybody know who the "most CC providers" are that will treat it as a purchase rather than a cash advance?

The only way to be sure is to call your card issuer and ask if they can tell you if they have HMRC down as an ordinary transaction in their database. However its pretty clear that HMRC are actually adding 0.91% (phone) or 1.25% (online) to the value of what you are paying to cover the commission they pay to Visa or Mastercard and with that being so it would be pretty surprising if it was not being treated as a normal merchant transaction. Most payments to HMRC are for several thousands and so these rather low credit card charge percentage charges they have agreed with Visa and Mastercard make sense. The card issuers obviously know that a lot of people paying these large sums will then end up borrowing the money for many months and paying them interest.

However as HMRC do not take Amex there are only going to be a small number of people with Visa or Mastercards in the initial higher commission period who will make anything much on this and only if they pay by phone and not online............

teddie2003 · 28-01-2009, 7:42 PM

Well, I've checked with Lloyds and if you use the Duo card, then Lloyds are saying that it is a "purchase" so hopefully I will get Air miles on my purchase.

NonGeographicalMan · 28-01-2009, 8:25 PM

Quote:

Originally Posted by teddie2003

Well, I've checked with Lloyds and if you use the Duo card, then Lloyds are saying that it is a "purchase" so hopefully I will get Air miles on my purchase.

Well if you really feel that Air Miles are worth more than the 0.91% additional charge for paying by Mastercard on the telephone or the 1.25% additional charge for paying by Mastercard on the internet then I suppose you could do this. But bearing in mind there is an additional cash charge here and that the Mastercard Duo Air Miles allocation rate is only 1 mile for every £50 of spend then I would strongly recommend not doing so. HMRC will not let you pay with the Duo Amex card on which you would get one one Air Miles for very £10 spend, although even then I would strong recommend against paying extra to earn the Air Miles.

The only people for whom using a credit card makes any sense are those who are getting 1.25% or more cashback on a Visa or Mastercard as an initial offer. I know of no Visa or Mastercards that pay more than 1% cashback as the long term run on rate.

Everyone else should pay their HMRC bill using their debit card, which there is no additional fee charged by HMRC to use.
You are aware you are going to be charged 0.91% or 1.25% extra for paying on your Visa or Mastercard aren't you?