Pay your tax bill by Certificate of Tax Deposit

Overview

The Certificate of Tax Deposit (CTD)scheme Scheme allowed you to deposit money with HMRC and use it later to pay certain tax liabilities.liabilities. The Depositsdate withthat HMRCyou earnbought dailyyour interestcertificate foris upknown toas 6the years.effective date of payment.

Closure of the Certificate of Tax Deposit scheme

FromOn 2322 November 20172017, thisHM Treasury gave notice that the scheme haswould beenclose. This means the Certificate of Tax Deposit scheme closed for new purchases,purchases buton 23 November 2017.

HMRC will continue to honour existing certificates until 23 November 2023.

You Anyshould certificatescontact remainingthe Certificate of Tax Deposit team before the scheme closes to tell us how you want to use your certificate.

If you think you will still have any certificates after this23 dateNovember 2023, you should becontact promptlythe submittedteam toas HMRCsoon foras you can to arrange a refund.

After that23 dateNovember HMRC2023 willwe’ll try to repay the balance of any certificate which remains unpaid and unclaimed. ButIf if we cannot do so (for example, because we’re unable to contact the current certificate holder after reasonable effort) we’ll regardconsider the balance as forfeited.

Who can use a tax depositsdeposit

TheUntil the scheme iscloses openon to:23 November 2023, you can still use your deposits to pay liabilities for:

• individuals
• individuals in a partnership — to pay liabilities that apply solely to them
• companies
• personal representatives — to pay liabilities of a deceased individual’s estate
• trustees — to pay liabilities of the trust

Contact the Certificate of Tax Deposit team to pay tax liabilities with your deposits.

Taxes you can pay with youra depositsdeposit

YouUntil 23 November 2023, you can use your deposits to pay liabilities for:

• Income Tax (Self Assessment)
• Class 4 National Insurance contributions
• Capital Gains Tax — not including Annual Tax on Enveloped Dwellings-related Capital Gains Tax
• Corporation Tax — only Series 6 certificates purchasedbought in 1993 or earlier can be used
• Petroleum Revenue Tax
• Inheritance Tax

Tax liabilities under investigation by HMRC

AYou depositmay couldhave alsomade bea helddeposit againstto anyhold ofagainst the tax liabilities that are under investigation by HMRC.

MakingYour a deposit canhelps helpto stop late payment interest charges on the amount owed while it’sit remains under investigation.

Interest may be added to the value of theyour deposit depending on when the deposit was made.

DepositIf madethe investigation will end before the scheme closes on 23 November 2023

You will be able to use your deposit to pay a tax liability paymentas datenormal. If there is a remaining balance on your certificate, you should request repayment at the same time.

If the investigation is unlikely to end before the scheme closes on 23 November 2023

You will have the option to use your deposit as a payment on account up to the value of the tax liabilities under investigation and any related late payment interest. If there is a remaining balance on your certificate, you madeshould request repayment at the same time.

You must contact the Certificate of Tax Deposit team with:

• the name of the investigating officer
• the compliance area undertaking the check
• your Unique Taxpayer Reference
• the tax years and amounts disputed
• the reference numbers and values of your Certificate of Tax Deposits

The Certificate of Tax Deposit team will confirm the position with the investigating officer before converting your Certificate of Tax Deposit to a depositpayment on account.

If you are unsure if the dispute will end before the duescheme closes on 23 November 2023

You will need to:

1. Contact the investigating officer to confirm the position of your case.
2. Follow the guidance on this page that’s relevant to you.

Protection against late payment Interest

Existing protection against late payment interest will continue to apply if you are setting off your deposit as a payment on account.

The effective date of payment of your Certificate of Tax Deposit will remain as the taxlater liabilityof undereither investigation,the:

• date that it was bought
• due date of outstanding liabilities

The cover provided against late payment interest will bedepend addedon towhen you bought your certificate and the value of theyour deposit.certificate.

Deposits made before the tax liability payment date

TheIf you bought your certificate before the due date of the tax liability under investigation, the element of tax due that is covered by the deposit will be treated as being paid on its due datedate. andLate payment interest will not attractbe latecharged on this amount.

Late payment interest.interest will be charged on any remaining tax due that is not covered by the deposit.

DepositDeposits made after the tax liability payment date

If you makemade your deposit after the date the tax liability was due, late payment interest will notapply befrom addedthe due date of the tax liability to the valuedate ofthe yourdeposit deposit.was made.

Late payment interest charges will only be addedcharged upon toany thetax datedue thethat depositis wasnot made.covered by the deposit.

Interest on your tax deposits

You’ll get daily interest on tax deposits over £100,000 from the date shown on your Certificate of Tax Deposit. The interest will end on one of the following dates, whichever comes first:

• the due date of the tax liability you pay (in full or part) using the deposit
• the date you withdraw your deposit for cash
• the sixth anniversary of the date on your certificate

You can leave your deposits for longer than 6 years but no interest will be paid after that. Any certificates remaining after 23 November 2023 should be promptly submitted to HMRC for a refund.

Interest will be added to the value of your certificate when you use it to pay off a tax liability or withdraw your deposit. WhenYou’ll you do either of these things you’ll get a letter confirming how much interest you have received.received when you do.

ToContact the Certificate of Tax Deposit team to check the level of interest earned on a tax deposit you have made under the Certificate of Tax Deposit scheme, contact HMRC’s Certificate of Tax Deposit team.scheme.

Rates of interest on your deposit

When you made a tax deposit, HMRC will have sent you a letter to confirm the interest rate that applied. This interest rate will apply to your deposit throughout the first year.

Money on deposit for longer than 1one year

The interest rate applied each year after the first year, is the rate that’s in force on the anniversary of the date shown on your Certificate of Tax Deposit.

For example, the rate of interest that’s in force on the second anniversary of your certificate will apply throughout the third year that your money is on deposit.

Current rates of interest

The following rates are effective from the 6 March 2009.

Deposits	Interest rate
Under £100,000	No interest
Over £100,000 held under 1 month	No interest
Over £100,000 held over 1 month	Tax rate: 0.75% Cash rate: 0.25%

Contact the Certificate of Tax Deposit team forif detailsyou ofneed ratesmore beforeinformation Marchabout 2009.rates.

When interest is not due

FromSince 5 December 2008 there’s been no interest due against deposits of less than £100,000. This includes weekly or monthly instalments you make that are less than £100,000 each.

Tax on interest you have received

Any interest you get on your deposits is paid gross (without tax deducted at source). You must therefore treat all of this interest as part of your income for tax purposes when completing your annual tax return.

MakeMaking a deposit

FromSince 23 November 2017, ityou ishave nonot longerbeen possibleable to to:

• make a new deposit.

  You cannot deposit

• top up an existing certificate.
  certificate

Pay tax with a deposit

To use your deposits to pay a tax liability, you must send your Certificate of Tax Deposit with written instructions explaining how you want the deposit to be used.

If you have more than one liability you can specifyconfirm the order you want them to be paid in. If you do not specifyconfirm anthe order of payment, the oldest liabilities arewill be paid first.

Send your certificate and instructions to HMRC’sthe Certificate of Tax Deposit Teamteam. Once the Certificateteam of Tax Deposit Team have it, it takeswill take 10 to 14 days to allocate the deposit to your liability.

If the tax liability relates to an ongoing investigation that is unlikely to end before the scheme closes, read the ‘Tax liabilities under investigation by HMRC’ section of this guide.

If you do not use the full value of a certificate

If you only want to use a part of a certificate’s value to pay a tax liability you must specifyalso whatgive you want to happen with the Certificate rest of itsTax value.Deposit Youteam canyour either:

• withdrawbank thedetails, balanceso in cash
• get a Balance Certificate for use against a future liability (this certificate will have the samebalance datecan asbe the original one)

refunded.

If your tax liability is more than the value of your certificate

If the value of your certificate isdoes not enoughcover tothe meet your tax liability, you needowe, toyou’ll arrangeneed to pay thethis shortfallimmediately. immediatelyThis towill mean you avoid or minimisereduce late payment penalties and interest charges.

To get an up to date valuation of your certificate (including interest earned) contact HMRC’sthe Certificate of Tax Deposit team.

Making late payments using a Certificate of Tax Deposit

If you pay a tax liability after its due date using a Certificate of Tax Deposit dated before the due date, you will not be charged late payment interest.

Pay another person or company’s tax

A Certificate of Tax Deposit areis not transferabletransferable, but you can use them to pay another person’s tax liabilitiesliabilities. ifYou youcan submitdo athis writtenby requestwriting to HMRC’s Certificate of Tax Deposit Teamteam.

A company can submit a written request to use tax deposits and pay the liabilities of:

• its holding company
• its subsidiary
• another subsidiary of its holding company

Confirmation of either the subsidiary or holding companies, or both, is also needed to get the higher rate of interest.

Withdraw a tax deposit

You should withdraw your deposits before the scheme closes on 23 November 2023. This will stop any delays if you do not have any tax liabilities due before then.

To withdraw a deposit, send the Certificate of Tax Deposit along with a written request to HMRC’s the Certificate of Tax Deposit team. You must also includegive bank details of the account you would like the funds paid into.

Bankinto, detailsincluding required:the:

• account name
• account number
• account sort code
• bank or building society name

OverseasIf customersyou’re an overseas customer, you should contact HMRC’sthe Certificate of Tax Deposit TeamDeposit team to discuss.discuss how to withdraw your deposit.

How your deposit will be repaid

You will receive your repayment as a credit to your bank account by Faster Payment.

Repayments are usually made within 12 working days.

The date for calculatingworking out the interest (where appropriate) will be the date we instruct our bank to credit your bank account.

Tell HMRC about changes

Changes of address

YouIf willyou receivehave changed your repaymentaddress bysince ayou creditbought to your bankcertificate, accounteven byif Fasterit Payment.was some time ago, contact the Certificate of Tax Deposit team.  You will need to give:

Notify

• your changesprevious toaddress HMRC

details

your new address details

your taxpayer reference number (the 6-digit number on the top left-hand side of the certificate that starts with a zero)

the Certificate of Tax Deposit reference (the 6-digit number on the bottom left-hand side of the certificate)

Deceased cases

If the named trustees or executors change or the individual named on the certificate dies, we’llHMRC will need signed written authority to deal with the proceeds and amend the certificate. This must include:

• the full name of each trustee or executor named on the certificate
• their signatures confirming their agreement to the change
• the certificate’staxpayer reference number (the 6-digit number on the top left-hand side of the certificate that starts with a zero)
• the Certificate of Tax Deposit reference (the 6-digit number on the bottom left-hand side of the certificate)

Send the written authority to HMRC’sthe Certificate of Tax Deposit Teamteam.

Notifying

Changes you of changesbusiness toname

If your business has stopped trading, or the schemebusiness name has changed since the certificate was bought, contact the Certificate of Tax Deposit team.

OnYou 22will Novemberneed 2017,to HMgive:

• the Treasuryprevious gavetrading noticename of the scheme’sbusiness
• evidence closure.
  of the change of name
• the taxpayer reference number (the 6-digit number on the top left-hand side of the certificate that starts with a zero)
• the Certificate of Tax Deposit reference (the 6-digit number on the bottom left-hand side of the certificate)

If you losehave lost a Certificate of Tax Deposit

You must write to HMRC’sthe Certificate of Tax Deposit Teamteam to report a lost certificate. They’ll send you an indemnity form to complete and return.