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Credit Card Surcharges end on 13th January 2018!

Under new legislation which comes into force in the UK on 13th January 2018, surcharges should not be added as transaction fees when you pay for your goods or services using a credit card. These can be as high as 2% or 3% and are added when you select to pay by credit card as you check out of an online store.

The new legislation applies to UK based traders and retailers as well as local authorities and government bodies such as the DVLA and HMRC and you will be able to challenge any organisation which continues to add the surcharges after 13th January 2018.

This is good news for customers and shoppers …. but possibly bad news for some taxpayers!

With regard to HMRC there is an added twist as a result of this legislation. HMRC are obliged to collect the full amount of any tax due and therefore cannot deduct a card processing fee from the amount collected. In view of this HMRC have announced that from 12th January they will no longer accept credit card payments in payment for any tax liability.

This will affect many thousands of taxpayers across the country as time goes by. In the short term this may cause difficulties for those who need to pay their 2016/17 self-assessment liabilities, or are self employed taxpayers who need to make their second payments on account for 2017/18 - both of which are due by the 31st January. These taxpayers will find they cannot pay online by credit card as they have done in the past.

They will be able to pay using a debit card but in order to do so monies will have to be available in their account when the payment is authorised. This may need some advance planning and transfers between accounts in order to assemble the necessary funds to make the payment on time and avoid a late payment penalty from HMRC if the transaction is declined due to lack of funds!

If you need help or advice with any aspects of self assessment or self employment, please email william.beckerleg@bilbeck.co.uk to arrange an initial meeting, free of charge for the first hour.

 

 

 


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