Closure of Certificates of Tax Deposit scheme
The Certificates of Tax Deposit scheme had been available for many years. Under the scheme, a taxpayer could purchase a certificate from HMRC and subsequently use the certificate either to pay a tax liability or obtain a refund.
They were often used where a liability was in dispute with HMRC, and a certificate was purchased to both put funds in place to pay the liability should HMRC win the dispute and also to mitigate the interest charge on the eventual payment of the liability.
In November 2017 it was announced that the scheme was being closed. No new purchases were able to be made from 23 November 2017 but existing deposits would be honoured until 23 November 2023.
HMRC have recently been writing to deposit holders to remind them of this expiration date.
There are options available as to how to proceed, such as request a refund of the deposit or offset against a current liability, but where the original potential tax liability is in dispute funds should continue to be put aside in case the liability becomes payable.
If you believe you hold a certificate of tax deposit, then please contact us at info@streetsweb.co.uk as the appropriate course of action for you will depend on your specific circumstances.
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