Certificates of Tax Deposit Schemes Closed
The government have put an end to the Certificate of Tax Deposit scheme (CTD), announcing they are no longer available to buy from midnight on 23 November 2017.
Although this decision has been made to ensure “the tax system is simpler and fairer”, current certificates will be honoured for an additional six years after the closing date, up until 23 November 2023. From then, refunds can be issued by HMRC who will aim to repay any certificate balance that remains unpaid or unclaimed.
However, the Association of Taxation Technicians (ATT) are concerned at the lack of consultation on the closure of the CTD scheme, particularly with the non-sharing of evidence that prompted the closure.
What are Certificates of Tax Deposit Schemes?
Simply put, CTDs enable taxpayers to deposit money with HMRC and use it later to pay certain tax liabilities, while they can earn daily interest up to six years.
Deposits can be held against any of the tax liabilities listed below under investigation by HMRC. Moreover, late payment interest is only charged up to the date the deposit was made
Users of the scheme include; individuals, individuals in a partnership, companies, personal representatives, and trustees, while there are a broad range of taxes that can be paid using CTDs such as:
- Income tax
- Class 4 NIC
- Capital Gains Tax
- Corporation Tax
- Inheritance Tax
- Petroleum Revenue Tax
The closure of CTDs may affect a number of taxpayers across the country, since the scheme enabled users to be protected from late payment interest and penalties where tax liabilities are due following disputes with HMRC.