HMRC changes its rules for tax payments by business debit card

A new piece of legislation – the catchily named The Fees for Payment of Taxes, etc. by Card Regulations 2020 – was placed before the House of Commons on Tuesday and will become law on 1st November.

I don’t think it has an impact on any method of earning miles and points for paying HMRC.

To summarise the impact of the new rules:

The Regulations, with effect from 1st November 2020, revoke and replace the Fees for Payment of Taxes, etc. by Credit Card Regulations 2016 (S.I. 2016/333) and the Fees for Payment of Taxes, etc. by Credit Card (Amendment) Regulations 2017 (S.I. 2017/1262).

Regulation 2 provides that a fee is payable whenever a business credit or debit card is used to make a payment to Her Majesty’s Revenue and Customs (“HMRC”). Under the revoked legislation, a fee was only payable to HMRC in relation to payments with specified business credit cards and was not payable in relation to payments by any debit cards. The Regulations accordingly increase the range of cards in respect of which a fee is payable. The fee is determined by the formula in Regulation 3 and is equal to the sum of the three fees ultimately incurred by HMRC when receiving payment by card.

This means that payments to HMRC using a BUSINESS debit card will, from 1st November, incur a fee.  Currently, business debit card payments are free, as are payments by personal debit cards.

Off the top of my head, cards used by HFP readers to generate miles from HMRC are not business debit cards.  If anyone thinks otherwise, please let us know.

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