Question of the week: Now the taxman accepts credit cards, can you earn rewards?

Former_MSE_Andrea

Now the taxman accepts credit cards, can you earn rewards on it?

This 31 Jan tax deadline is the first that the taxman is accepting credit cards. The good news is it counts as a ‘purchase’ not ‘cash withdrawal’ so it's eligible for cashback or rewards. The bad news is there’s a fee of 0.91% if you pay by phone, 1.25% online, which will eat away the gain for most people.

Sadly the top cashback card, the Amex Platinum* which pays a mammoth 5% intro cashback for 3 months on up to £4,000 spending, isn’t yet accepted by the taxman, though apparently it is being worked on. Once that happens there’ll be a loophole allowing you to make £200 simply by paying that way, provided you clear your card in full each month to avoid interest.

For more read the Cashback Cards guide.

If you'd like to discuss this click reply below.


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Roger1

Great to be able to pay our tax bill by credit. Not so great that online or phone payments attract fees. So how can I pay by post, avoiding fees?

The HMRC reminder to pay by 31.1 arrived moments before I received the MSE e-mail. Credit card payment is not mentioned.

Is there a form I can download? (I've found the link to pay online by credit card but do not want to pay more than is absolutely necessary!)

Thanks.


Roger

Mikeyorks

Roger1 wrote: »

Great to be able to pay our tax bill by credit. Not so great that online or phone payments attract fees. So how can I pay by post, avoiding fees?

You don't. It's the fact that you're paying by CC that attracts the fee .... not the fact you're doing it online / by phone.

General Govt policy that where their agencies accept CC ... they pass the charge on to the end user.

But you did well to find a link as they've not generally updated their Payment Methods pages. It's here (via BillPay) if anyone wants it :

https://www.billpayment.co.uk/hmrc/scripts/index.asp

sunlover_3

Does anyone have any thoughts on collecting clubcard points instead, thought maybe it would be worth it?.

jaqsaver

I have found on the HMRC site how to pay online by CC but there is nothing about paying by CC over the phone. Has anyone found the phone number to use?

Mikeyorks

jaqsaver wrote: »

I have found on the HMRC site how to pay online by CC but there is nothing about paying by CC over the phone. Has anyone found the phone number to use?

Strangely their Search facility has just produced the 'online' link today. It didn't yesterday and I had to look in all sorts of corners to find the BillPay (online) link. So I'm a bit suspicious they won't be broadcasting a 'phone number at this proximity to the SA peak (31/1) ..... lest it is overwhelmed.

In the past they have dropped say 100k 'flyers' in with the SA statements, issued in Dec, in order to gauge the take up of a new initiative which was still bedding in. If I remember correctly that was the Debit Card facility they were running via their St Austell contact centre at the time. And it still got blown out of the water on peak days!

Perhaps they're running this one under the parapet until after the peak?

Roger1

sunlover wrote: »

Does anyone have any thoughts on collecting clubcard points instead, thought maybe it would be worth it?.

IMO cashback is not worth it - paying 0.91% or 1.25% to earn say 1% probably isn't worth the effort.

I've calculated pluses and minuses using my miles-earning cards:
- bmi MasterCard @ 1.5 miles per £ means using the card is cheaper than buying miles from bmi; the fee-payable bmi MasterCard is better still;
- Tesco credit card (n.b. I have the older, higher-earning card and am on the grandfathered conversion rate) is similar when converting to BA Miles and has the attraction of alternative Clubcard deals. Newer Tesco credit cards wouldn't be worth the hassle.

In both cases, you have cashflow benefits.

jaqsaver wrote: »

I have found on the HMRC site how to pay online by CC but there is nothing about paying by CC over the phone. Has anyone found the phone number to use?

I phoned. I was given 0845 305 1000. www.saynoto0870.com offers 01726 201078.

Mikeyorks

Roger1 wrote: »

I phoned. I was given 0845 305 1000.

That's the St Austell line I referred to previously. And I suspect you won't get far. They used to accept Debit Card over the 'phone ..... but it's now a covert number for that purpose. Can't see HMRC using them for Credit Card payments??
http://www.hmrc.gov.uk/manuals/baagmanual/baag60020.htm#5

Roger1

Mikeyorks wrote: »

That's the St Austell line I referred to previously. And I suspect you won't get far. They used to accept Debit Card over the 'phone ..... but it's now a covert number for that purpose. Can't see HMRC using them for Credit Card payments??
http://www.hmrc.gov.uk/manuals/baagmanual/baag60020.htm#5

Another forum says to ignore the automated welcome message, the poster there used his/her credit card.

Try it and see?