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HMRC Won't Accept Credit Card Payments: Here's Why and How Else to Pay
Brits are not able to pay their tax bill with a personal credit card. We'll explain why the HMRC has taken away the credit card payment option and present other ways to pay your taxes.
Why Won't HMRC Accept Credit Card Payments Anymore?
HMRC does not accept personal credit card payments. This is because merchants are no longer allowed to pass on credit card processing costs to consumers. Rather than absorbing these fees at the taxpayers' expense, HMRC opted to remove the personal credit card option entirely.
The revised EU Payment Services Directive II is meant to protect consumers, as credit card payment fees were often not obvious upfront and could add significantly to the cost of a purchase. Not all merchants imposed a credit card surcharge, but of those who did, typical fees of 2% - 3% were not uncommon.
While personal credit cards were banned for tax payments in 2018, corporate and business credit cards are still accepted. However, because the surcharging ban only applies to consumer cards, HMRC still levies a fee for business card transactions to cover its own costs.
Current 2026 data shows HMRC typically charges a non-refundable fee of around 1.5% for corporate credit card payments, though these merchant service charges can vary slightly depending on the specific card provider and transaction type.
Under current regulations, HMRC is prohibited from charging fees to personal credit cards, which is why that payment method is no longer available. Taxpayers looking for fee-free alternatives can still use personal debit cards, online bank transfers (Faster Payments), or Direct Debits, all of which remain accepted without additional charges.
Businesses can still use a corporate credit card to pay their taxes in the UK.
Why Did HMRC Impose a Fee on Consumers to use a Credit Card?
Credit card payments are costly to a merchant and, in theory, surcharges are meant to compensate a merchant for the cost of accepting a credit card payment, as opposed to other payment methods.
When a merchant accepts a credit card payment, they themselves suffer a cost. For example, when you buy a dinner costing £100 using your credit card, the restaurant may only get £98—the difference is eaten up by a Merchant Service Charge (MSC). The MSC is generally composed of the interchange fee (maximum 0.3% for credit cards) and other processing costs to the bank. MSCs are variable but can be expected to come in around 1.5%.
Now that HMRC can't offset these costs to credit card payers via a fee or surcharge, the HMRC will no longer accept personal credit card payments.
How Can You Pay Your Taxes?
Those who used to pay taxes with a credit card have a number of other payment options. According to Gov.uk, taxpayers can still use a debit card to make payment, as well as direct debit, bank transfer or cheque. You can learn more about the following payment methods from the Gov.uk page on Paying HMRC.
Be sure to leave enough time for your payment to arrive. Specifically, the deadline to pay any tax owed for the 2024/25 tax year is January 31, 2026. If your deadline falls on a weekend or bank holiday, ensure your payment reaches HMRC on the last working day before to avoid automatic late payment penalties
| Estimated Time to Receive Payment | Payment Method | |
|---|---|---|
| 5 Working Days | Direct Debit (first time) | |
| 3 Working Days | Direct Debit (repeat orders) | |
| Cheque through Post | ||
| BACS | ||
| Same or Next Working Day | Debit Card | |
| Faster Payment (online or telephone banking) | ||
| CHAPS | ||
| At your Bank/Building Society |
Banking technology has improved significantly, and Faster Payments are now typically near-instant. This is a vital advantage for those making last-minute payments on the January 31 deadline.
While the ban on credit card usage fees was meant to protect consumers, the HMRC's decision to scrap credit card payments is a prime example of how the law can have a negative impact on the public. It will especially hit those without the money the pay their taxes all at once, who need to spread out the cost of their tax payment over time.
Instead of using a 0% credit card to reduce the upfront burden of a hefty tax bill, for example, consumers unable to handle their tax bill in one go may now have to resort to more costly borrowing options.
To put this into perspective, as of January 2026, the average credit card interest rate (APR) in the UK reached 24.66%, the highest level in over 30 years. Using high-interest credit or personal loans to cover a tax bill has become significantly more expensive, making early planning and HMRC 'Time to Pay' arrangements more critical than ever.