'Pay tax by credit card: Fantastic news… for some' blog discussion

2

Replies

  • liclic Forumite
    275 Posts
    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!
    Lic.
  • darren72darren72 Forumite
    1.3K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    Is anyone able to confirm whether their transactions have gone through as purchases to the HMRC ?

    Thanks
  • NonGeographicalManNonGeographicalMan Forumite
    1.4K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭
    lic wrote: »
    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.:mad:
  • teddie2003teddie2003 Forumite
    57 Posts
    Part of the Furniture Combo Breaker
    rodent wrote: »
    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?
    Val :)
  • NonGeographicalManNonGeographicalMan Forumite
    1.4K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭
    teddie2003 wrote: »
    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............
  • teddie2003teddie2003 Forumite
    57 Posts
    Part of the Furniture Combo Breaker
    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.
    Val :)
  • NonGeographicalManNonGeographicalMan Forumite
    1.4K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭
    teddie2003 wrote: »
    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?:eek::confused:
  • edited 31 January 2010 at 9:52PM
    stphnsteveystphnstevey Forumite
    3.2K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    edited 31 January 2010 at 9:52PM
    Couldn't you Stooze the money and get back more than the 0.91% fee?

    For instance I could offset it against my 5% mortgage and make 4%

    Is this just Self Assessment - can you pay PAYE, VAT and CT with CC?
  • stphnsteveystphnstevey Forumite
    3.2K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    Whats the number to call to pay on the phone by credit card?
  • I just received a tax bill for £18k payable in January 2013. I was thinking of paying on a long zero % purchases credit card, and stoozing the balance, or maybe on a cash back card?Does anybody know if if this still works ontax payments?
This discussion has been closed.
Latest MSE News and Guides