HMRC is urging taxpayers to use any remaining certificates of tax deposit (CTD) before the scheme closes later this year.
The scheme has been closed for new deposits since November 2017, however, anyone with remaining certificates still has time to act.
The CTD scheme previously allowed taxpayers to deposit money with HMRC and use it later to discharge tax bills and other tax liabilities.
Often utilised where a tax liability was being disputed with HMRC, CTDs were used to put funds in place should HMRC win the dispute. They helped to mitigate the interest payable on the liability when it eventually needed to be paid. Interest could also be accrued on the amount of the deposit.
The scheme was open to individuals, companies, and trustees, and could be used to pay liabilities for Income Tax (Self Assessment), Class 4 National Insurance contributions, Capital Gains Tax, Corporation Tax, Petroleum Revenue Tax, and Inheritance Tax.
The CTD scheme will close on 23 November 2023, with HMRC continuing to honour any existing certificates until this date.
HMRC has recently issued letters to deposit holders to remind them of this expiration date and explain the various options available.
After the scheme ends, HMRC will attempt to refund any remaining balances of unpaid and unclaimed certificates.
Certificates can be used to offset against specific current tax liabilities until the CTD scheme closes in November.
In cases where the potential tax liability is still in dispute, funds should be kept aside in case the liability does become payable in the future.
Alternatively, certificates can be submitted for a refund of the amounts deposited up to, or promptly after, the closure date. It is advisable to apply for a refund rather than waiting for HMRC to repay the balance as, if they cannot do so for any reason - such as out-of-date contact details - the balance could be forfeited.
If CTD holders did not receive a reminder letter, then they should contact HMRC at the address below to update their record with their current address:
1 Atlantic Square
21 York Street
If you’d like more information on the CTD scheme and how to ensure that you don’t lose access to any assets being held, our highly skilled team of tax accountants are dedicated to offering high-quality, professional tax services.
For advice and guidance, please contact our team.