Self Assessment - Paying by Credit Card (Cashback Card)

darren72

I noticed Martins article on using your credit card to pay your tax bill:

http://forums.moneysavingexpert.com/showthread.html?p=18062675

Has anyone done this themselves - and does the credit card companies definitely consider the transaction a 'purchase' rather than a cash advance ?

Thanks in advance,

thehazards

Unfortunately the tax man charges 1.25%...you get the following message when you try to pay:

Please note that the charge for paying by credit card is 1.25% of the transaction amount as shown below. If you do not accept the charge we will be unable to proceed with this payment request, but if you would like to make this payment by debit card, where no charge will be raised, please select "Edit payment details" below, otherwise click on "Cancel payment".

So unless you are getting over that in cashback or deals then it's not worth it. Presumably though the charge means that your card issuer will not charge it as a cash advance. It would have been nice to put my 10K bill on the card!

tipsychick

If you pay over the phone, they only charge 0.91%. No explanation for the discrepancy was forthcoming when I queried it.

They don't take Amex, so the 5% cashback on their Platinum Cashback Card is out, I'm afraid. Unfortunately I only discovered this after applying for the card specifically for this purpose! They take Mastercard and Visa though.

I've heard it said that you can claim back the credit card handling fee, as you can normally claim for any financial charges, i.e. business account fees. I haven't had that verified by an accountant though, so DYR!

Mikeyorks

The ability to pass on the CC fees is contained in two separate (one each for telephone / Internet) Statutory Instruments laid before the House of Commons in July 08. (SI 1948 & SI 2991). But the reason they are different isn't covered there.

That was in an earlier draft discussion. Which pointed out the fees would be different ...... as the charging structures for the two different payment channels are different. Because the companies providing them had different risk levels.

The quote below is from a Budget document in March 08 .... and qualifies the charge levied by HMRC will be exactly that levied to HMRC. Hence the difference ...... and all a bit much for the call centre operative to explain?

Legislation supports a range of payment methods, but HMRC cannot accept payment by credit cards except in certain limited circumstances such as at ports and airports. Legislation will be introduced in Finance Bill 2008 to allow individuals and businesses to pay tax, duties etc by credit card. Taxpayers who choose to pay in this way will be charged the transaction fee that HMRC will itself be charged.