What and How to Pay Tax Bill by Credit Card or Direct Debit

Pay Tax Bill by Credit Card or Direct Debit

It’s that time of the year to pay your tax bill.

HM Revenue and Customs (HMRC) provides you with options to pay by debit or credit card. But certain rules apply.

Since 13 January 2018, HMRC has imposed a ban on using a personal credit card for tax payments. According to a written warning that was sent out, only “debit cards and corporate credit cards continue to be accepted.”

This is in response to the new rules that prevent the tax agency from passing on the bank charges of credit card payment processing to the taxpayers. This leaves direct debit, online, or telephone banking services as payment options.

You can use your corporate credit or debit card to pay for the following

  • Corporation tax
  • Employers’ PAYE and National Insurance
  • Miscellaneous payments or bills with payment reference that starts with ‘X
  • Self Assessment
  • Stamp Duty Land Tax
  • Underpaid income tax
  • VAT

But you can only pay by Direct Debit for:

  • Construction Industry Scheme (CIS) deductions
  • Machine Games Duty

How to pay your tax bill by Direct Debit

  1. Set up an online account with HMRC. You can sign up as an individual or an organisation.
  2. If you already have an existing direct debit account, you can change it or arrange a new one.
  3. Only the authorised signatory on the account can make payments from a UK bank account.

Limitations on payment options

  • You are not allowed to use multiple card payments for the same tax.
  • Use another payment method if you are unable to pay a tax bill in full using a single card.
  • You can make more than one card payment provided that each one is for a different tax. For example, one card is used to pay Corporation Tax, while another is used for employer’s PAYE.
  • Using a corporate card comes with a fee.

Ready to pay your tax bill online? Know that during busy times, online services may be slow. It is also important to check if there are current problems or when the online payment option is not available.

For more information on UK Tax Returns Online, tax refund, and tax rebate, refer to an expert and service provider of tax services.

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