Concerns have been raised by a recent HMRC decision to ban people from paying their self-assessed tax bill via the post office, with a ban on paying via personal credit cards to come into effect soon.
Approximately 11million people have to fill out a self assessment form each year, and the 31st of January deadline is looming large.
The issue specifically that has been raised by the Low Income Tax Reform Group (LITRG) is that the limitations on ways people can pay tax will make it harder for people to do so in time. This could lead to many people who were initially relying on the credit card to pay it resorting to high interest payday loans to avoid being penalised which could cause further debt.
Anne Fairpo, Chair of LITRG, said:
“It is important that taxpayers pay their tax on time in order to avoid late payment penalties and being pursued by HMRC for the debt outstanding. Two recent changes mean that making payments may not be straightforward for some taxpayers and we are keen to see that these changes are publicised as widely as possible.
“If making the tax payment will cause hardship, we strongly recommend people contact HMRC as soon as possible, and certainly before the due date of payment, to discuss their case..
“Since 15 December 2017 it has not been possible to pay a tax bill at the Post Office. For people with no local bank branch and who are unwilling or unable to use internet banking or telephone banking, making a payment by post may be the only solution
“From 13 January 2018 it will no longer be possible to pay HMRC from a personal credit card. This means taxpayers may have to find alternative sources of funds to make their payment. While credit card charges might be expensive, they are considerably more affordable than some loans.”
HMRC has commented saying that everyone who needs to fill out the form has been sent a letter which outlines the changes.
The credit card option, which is soon to be withdrawn, was used by 454,000 people in 2016/17. It is now being withdrawn due to new changes which mean that it is illegal to charge an additional fee on any transaction made using a credit card. HMRC up until this point charged 0.6% on any tax payments via credit card and would have to foot the additional cost when the new legislation comes in.
“It would be unfair to expect other taxpayers to pick up this cost,” a spokesman for HMRC said.