A Government crackdown on credit card charges has backfired as HMRC has announced that it will stop accepting credit cards from 2018.
Starting January, “rip off” fees that are charged to consumers by government bodies and companies when they pay via credit card will be completely banned in the United Kingdom.
The move was initiated to help consumers by allowing them to pay by credit card free of charge. However, HMRC has said that the move will push it to stop accepting credit cards altogether.
This is because it is not able to absorb the cost of credit card fees as this would indicate charging costs back to customers through the “public purse”, therefore generating a burden for taxpayers.
According to figures obtained by Telegraph Money, HM Revenue and Customs (HMRC) required £50m in credit card fees that are charged to taxpayers that must pay their outstanding tax bills on credit over the last five years.
Last night, consumer groups warned that the move by HMRC was “consumer unfriendly” and could establish a dangerous precedent for government departments and other councils.
The director at Fairer Finance, James Daley, stated: “This is a very un-consumer friendly move by HMRC which restricts consumer choice. This is not what the Government intended to happen as a result of its fees crackdown.
“It will be a blow for people who want to spread out the cost of paying their tax bill by putting it on credit card and could force some people to take out loans. There is also a danger that other departments and councils may see this as an opportunity to follow suit.”
A spokesperson from HMRC stated: “We will no longer be accepting personal credit card payments from the 13 January as new rules mean that we can no longer pass on what our bank charge for processing a credit card payment. It would be unfair to expect other taxpayers to pick up this cost. There are a range of ways for people to pay us depending on the type of tax being paid, including debit cards, Direct Debit, Faster Payment and BACS.