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End of the 'rip-off': all charges for paying by card to be banned

All extra charges added to payments for goods and services made by card are to be outlawed, ending a “rip-off” that costs Britons hundreds of millions of pounds a year, the government has announced.

Fees for paying with plastic – most commonly a credit card – are routinely levied on everything from low-cost flights and tax bills to cinema tickets and takeaway meals, but the Treasury announced that these would be consigned to history from January 2018.

The government said the move, which builds on an EU directive, would mean “shoppers across the country have that bit of extra cash to spend on the things that matter to them”. However, some commentators said they expected that many companies would simply hike their prices to compensate for the loss of this money, or change the name of the fee.

The fees have been a moneyspinner for some government departments and official bodies, and they will also be banned from imposing these charges. The Driver and Vehicle Licensing Agency currently adds a flat fee of £2.50 to vehicle tax payments by credit card, and its own data has previously suggested that it collects more than £8.5m a year in these charges.

Similarly, HM Revenue & Customs charges a fee for paying a tax bill...