HMRC has discontinued the usage of credit cards to settle your tax bill.

In the 2015-16 tax year, about 800,000 taxpayers used their credit card to settle their tax due through self-assessment. However, beginning of January 13th, this will no longer be one of HMRC's payment alternatives. This is vital to understand before attempting to pay any tax owed for the 2016/17 tax year through self assessment.

Which credit cards are at risk?
Personal credit cards, as well as PayPal and ApplePay, are prohibited. Business and corporate credit cards, on the other hand, will continue to be accepted forms of payment.

Why can't I use my own credit card to pay?
The short answer is that new legislation that went into effect on January 13th prohibits businesses from charging customers a fee for using Visa or Mastercard credit cards. HMRC does not wish to bear the cost of processing credit card payments, hence they have been eliminated as a payment option. The extra charges were £13.2m in 2015-16, so you can see where they're coming from.

Not ideal timing...
Given that the self-assessment deadline is barely two weeks away, the timing of this new regulation could be better. There is no chance that all of the taxpayers who paid by credit card last year were aware of the rule change before the payment deadline. Some people will be caught off guard because they planned to do the same thing this year and received little notice from HMRC.

What are my other payment alternatives if I don't have my credit card?
You can pay your self-assessment tax bill using BACS, quicker payment, at your bank, direct debit, debit cards, or by postal cheque. You only need to match the payment date with the HMRC deadline. They are implying that the funds must be in their account before the deadline, therefore you must account for your bank's transfer time.

You can also spread the expense of your bill by working with HMRC to set up a budget payment plan. Instead of one large lump cash, this is divided into monthly or weekly payments.

Does this imply that all government agencies have prohibited credit card payments?
Credit cards are not prohibited in all government departments. The DVLA will accept credit cards without the £2.50 fee that was previously charged. However, beginning January 13, 2018, you will be unable to pay corporate tax, stamp duty, or VAT with a personal credit card. You must examine the rules of the department with which you are working.

Are you concerned that you won't be able to budget for your tax bill?
If you've been relying on your credit card, this news could be devastating. Call HMRC to discuss your circumstances, particularly if you believe you will be unable to pay your regular amount. There is the option of paying in instalments and even taking a six-month hiatus in payments. The key to dealing with this difficult scenario is to contact them as soon as possible. The closer you get to the deadline, the less likely it is that you will be able to reach them on the phone.