The Clock is Ticking: Deadline for Certificate of Tax Deposits
On 22nd November 2017, HMRC made a significant announcement - the closure of the Certificate of Tax Deposit (CTD) scheme. However, they assured certificate holders that they would continue to honour certificates until November 23rd, 2023. This date is now fast approaching, and with the current value of outstanding CTDs to be resolved sitting at around £89m, it’s clear many holders still need to act.
Understanding the deadline
As we approach November 23rd, 2023, a crucial deadline is on the horizon for Certificate of Tax Deposit (CTD) holders with HMRC. This marks the final opportunity to offset tax obligations using a CTD. Following this, the standard withdrawal process will come into effect. It's worth noting that HMRC strongly recommends that certificate holders consider withdrawing their deposits before the scheme's closure on November 23rd if they don't plan to use it for tax settlement. This proactive step can help avoid potential delays, especially if there are no outstanding tax liabilities anticipated before the deadline.
What types of taxes are covered by the deposit?
Until the November 23rd deadline, CTD holders have the flexibility to use their deposits for a variety of tax liabilities such as:
- Capital Gains Tax (excluding Annual Tax on Enveloped Dwellings-related Capital Gains Tax).
- Corporation Tax (only Series 6 certificates purchased in 1993 or earlier can be used).
- Inheritance Tax.
- Class 4 National Insurance Contributions.
- Income Tax (Self-Assessment).
- Petroleum Revenue Tax.
How can I use my deposit or make a withdrawal ahead of the deadline?
Holders are being encouraged to contact HMRC’s Certificate of Tax Deposit Scheme team to either pay tax with a deposit or make a withdrawal. Once received, the team typically takes 10 to 14 days to allocate the deposit to your liability, with repayments usually processed within 12 working days.
It is crucial to contact the Certificate of Tax Deposit team before the scheme's closure. Kindly inform them of your intended use for the certificate. For those foreseeing certificates beyond November 23rd, 2023, don't hesitate to contact the team to facilitate a refund promptly. Your proactive approach ensures a smooth transition and optimal management of your financial assets.