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Many contractors may rely on their personal credit card when it comes to paying for their annual self-assessment tax return, however, HMRC is putting a stop to this method of payment. Currently, taxpayers are charged a fee by HMRC for paying by credit card, but from 13th January 2018, the EU Payment Services Directive 2 prohibits merchants (including HMRC) from recharging associated fees back to customers.

At the same time, HMRC is unable to absorb the cost of credit card fees as this would mean a cost to the public purse. The result is that HMRC will stop accepting credit card payment altogether. It’s worth noting that corporate, business and commercial credit cards are not affected by this change and personal customers will continue to have alternative payment options including direct debit, Faster Payment, BACs, debit card and CHAPs.

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Low Incomes Tax Reform Group (LITRG) Chair Anne Fairpo, commented, “This change is likely to have an adverse effect on people on low incomes who rely heavily on their credit cards. The timing of the cessation of credit card payments will be particularly inconvenient with the 2016/17 tax payment deadline looming.”   She advised, “An option for such taxpayers is to beat the change by filing their tax return and making payment by 12 January 2018. “If this is not possible and if taxpayers will have difficulty making payment as a consequence of the change, then they may be able to arrange ‘time to pay’ with HMRC, particularly if they apply before the payment deadline. Under this policy, taxpayers may be given the opportunity of paying their tax by instalments (paid by direct debit) rather than recovery proceedings being instituted for the full amount. Interest will still be charged on the late payments, but no penalties will be imposed.”

To find out more about contracting please contact Sophie on 01442 795100 or email sophie.lewis@dolanaccountancy.com.

Why Thousands of Contractors Choose Dolan Accountancy

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £125 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams
  • Free Access to FreeAgent – We offer all of our clients access to FreeAgent, free of charge
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few
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