Certificates Of Tax Deposit Prospectus (Series 7)

Introduction

Under the Certificate of Tax Deposits scheme HMRC will accept Deposits from people liable to United Kingdom taxes and other liabilities that are listed in the Schedule. The Treasury issues receipts for these Deposits under Section 12, National Loans Act 1968. These are called Certificates of Tax Deposit.

HMRC pay these Deposits into the National Loans Fund. Both:

  • the Deposit
  • its interest

will be held as a charge on the National Loans Fund, supported by the Consolidated Fund of the United Kingdom.

You can use your Certificate of Tax Deposit to pay any tax liability you may have, provided it is listed in the Schedule that is current on the day you purchase the Certificate.

We will accept these Deposits until the Treasury gives notice that they have terminated or temporarily suspended the scheme. The Treasury may also add taxes or other liabilities to the Schedule, and will give notice that they have done so.

The Treasury may also delete taxes or other liabilities from the Schedule (see Termination of the scheme). However, we will accept Certificates showing a Deposit date before the deletion, as payment of the deleted liabilities.

Making deposits

You can make Deposits to pay your own assessed taxes or liabilities as listed in the Schedule. Also:

  • Partnerships may make Deposits to pay assessed partnership liabilities;
    • Individual partners may make deposits in their own name to pay liabilities due solely by them. Deposits made from 06/04/2003 in a partnership name will no longer be accepted against an individual partner’s sole liability.
  • Personal representatives may make Deposits for payment of Scheduled liabilities due on, or from, a deceased person's estate.
  • Trustees may make Deposits to pay trust liabilities.

Deposits of £100,000 or more

You can make Deposits of £100,000 or more by using the Clearing House Automated Payment System (CHAPS).

Deposits by CHAPS

CHAPS allows you to make a sameday payment, as long as you initiate payment within the time specified by your bank or building society (usually between 9.00 am and 3.00 pm).

If you are paying by CHAPS you’ll need to provide your bank or building society with our bank account details.

 

Sort code

Account number

Account Name

10-51-67

23444401

AO Cumbernauld

Please ensure that you quote the following reference number:
  • 258/CTD Purchase/Depositer’s Name.

If you do not provide us with the reference number then it will delay us in issuing your certificate.

Once you have made payment you need to immediately send a confirmatory letter to:

HMRC DMB Banking Cumbernauld
CTD Team Room B1.26
St Mungo’s Road
Cumbernauld
G67 1YZ

stating:

  • the name and address of the Depositor
  • the date and amount of the payment
  • the full names of all Executors or Trustees, if the CTD has been purchased in the name of an Estate or a Trust

For a CHAPS payment made directly to our bank account the Certificate date will be the date on which the funds are credited to our account.

Deposits under £100,000

The first Deposit you make must be for a minimum sum of £500. Any further Deposit must be either:

  • for at least £250
  • enough to bring the amount you hold on Deposit up to at least the £500 minimum, if the amount you hold has dropped below that sum

Deposits of less than £100,000 may be made by cheque.

Please make your cheque payable to ‘HM Revenue and Customs only’ and send it to:

HMRC DMB Banking Shipley
Victoria Street
Shipley
BD98 8AA

Please send a covering letter with your cheque, giving the following information:

  • the name and address of the Depositor
  • the date and amount of the payment
  • the full names of all Executors or Trustees, if the CTD has been purchased in the name of an Estate or a Trust

Again, you must not pay them in directly to the Bank of England.

The Certificate date will be the date of receipt of the cheque by HMRC.

For all Deposits the HMRC CTD Team will send you a Certificate of Tax Deposit. It will specify:

  • the amount; and
  • the Certificate date (as detailed above).

Using deposits to pay tax

The Depositor (which can include a personal representative) may use a Certificate of Tax Deposit as payment towards any liability listed in the Schedule. You can get updated copies of the Schedule from:

HMRC DMB Banking Cumbernauld
CTD Team Room B1.26
St Mungo’s Road
Cumbernauld
G67 1YZ

If you want to use a Certificate of Tax Deposit to pay a Scheduled liability you must send it to the HMRC Banking Cumbernauld. You should also attach any instructions about how you want to use the Certificate, for example:

  • if the whole amount is to be used to pay a specific tax liability (or liabilities)
  • if part of the amount is to be used against a tax liability with the remainder either converted into a Balance Certificate, or repaid as cash

If your liability is less than the value of your Certificate, then you can pay it in full using:

  • a part of your Certificate's value
  • any interest which that part of the Certificate has earned

The remaining balance can be

In all of these circumstances HMRC CTD Team will issue a Balance Certificate to you for the remaining amount of your Deposit. These Balance Certificates will show the same date as the original Certificate.

For Certificates of Tax Deposit, the date on which your payment is due for a particular liability is the date shown in the Schedule. This date does not change if:

  • for any reason HMRC makes a late assessment
  • if your liability is not payable until later (for example, after a tax appeal is settled)

Using a Certificate of Tax Deposit to pay a tax liability will stop interest for late payment at the Certificate date. It will not stop the charge to interest on any part of your liability not covered by the Deposit.

You can ask us to use a Certificate of Tax Deposit to pay your liabilities in any order that you request. Neither HMRC nor any other Government Department can advise you the order in which you should apply these Deposits.

If you do not provide instructions for the order in which you want the liabilities to be paid, we will allocate the Certificate(s) to pay your oldest liabilities first.

Interest on deposits

You will get interest on your Deposits on a daily basis. However, this period of interest must never exceed six years. It will run from the Certificate date until the earlier of:

  • the due date of the liability it is being paid against
  • the date on which the Deposit is withdrawn for cash
  • the sixth anniversary of the date you the purchased the Certificate

The rate of interest paid on a Deposit during each year will be either

  • the rate in force on the date shown on the Certificate
  • for Certificates that are more than a year old, each year's interest will be at the rate in force on the first day of the Certificate's anniversary


On the day you purchase your Certificate we will send you the Certificate together with Form 811 CTD, which gives details of the current interest rates and how they are applied.

The Treasury will announce the rate or rates of interest in force including any changes.

Any interest that you receive will be paid without deduction of tax. However, we will always treat this interest as part of your income for tax purposes.

You can leave your Deposit for more than six years (subject to How the Treasury gives notice of changes to the scheme), even though it will attract no further interest or other increment.

Withdrawals for cash

You can withdraw a Deposit (or part of it), together with accrued interest for cash:

  • at any time
  • in any order that you like

The original relevant Certificate of Tax Deposit must accompany your request for withdrawal.

You should make your request to withdraw your Deposit for cash to:

HMRC DMB Banking Cumbernauld
CTD Team
Room B1.26
St Mungo’s Road
Cumbernauld
G67 1YZ

They will normally make a repayment within 12 working days of receiving your request.
You must make a request if you want to use your Certificate to:

  • partly pay a Scheduled liability
  • withdraw the balance immediately for cash

You should send both the original Certificate and your application to HMRC Banking Cumbernauld.


We will make repayments by sending a payable order, made out to the Depositor, to the address shown on the correspondence requesting withdrawal unless you or your personal representatives instruct otherwise. However, for withdrawals of £100,000 or more, we will make repayments by CHAPS electronic transfer when we receive your bank details.

For interest purposes, the date on which you withdraw the Deposit (or part of it) for cash, is calculated as either:

  • the day that we issue a payable order for repayment
  • the day that we give instruction to the Bank of England to directly credit your bank account

How the Treasury gives notice of changes to the scheme

The Treasury will notify Depositors of changes to the terms of this prospectus by issuing a Treasury Press Notice to Reuters.

If circumstances prevent a Press Notice going out, or the Treasury considers that a Press Notice would not provide adequate publicity, the Treasury can make a notification in any other manner that they think is necessary.

The Edinburgh and London Gazettes will then publish a notification of these changes as soon as possible. The Treasury may also vary or add to any of these methods of giving notice in the same way.

Termination of the Scheme

If the Treasury gives notice that they will no longer accept Deposits under the terms of this prospectus, you must either:

  • use your Deposit to pay a Scheduled liability
  • withdraw it for cash within the period (if any) specified in the notice

This specified period will not be less than six years.

If there is a temporary suspension of Deposittaking your existing Deposits will not be affected in any way.

Other terms

Certificates of Tax Deposit are not transferable and can only be used against the liabilities of the bearer of the Certificate. However, a company may use its Deposits to pay a liability of either:

  • one of its holding companies
  • a subsidiary or another subsidiary of its holding company

(These terms have the meanings given to them in Section 736 Companies Act 1985)

HMRC (and any other Government Department) will not recognise any transfer charge, trust or equity affecting the ownership of either a monetary Deposit or a Certificate of Tax Deposit, except when ordered by a court of competent jurisdiction. Except where otherwise stated, HMRC or any other Government Department will regard Depositors as exclusively entitled to the benefit of Deposits and the obligations created by them.

Further information

You can get details of current interest rates (PDF 112K) on our web site or by telephoning the CTD Team on 01236 785202.

HM Treasury, London, SW1P 3AG 1 October 1993 (revised 24 January 2003)

Schedule

Listed below are:

  • the taxes and other liabilities that you can pay using a Certificate of Tax Deposit
  • the dates each year that you have to pay these
Income tax and Capital Gains Tax before Self Assessment (for years before 1996-97, or, in the case of certain partnerships, before 1997-98)

Tax

Due dates

Income tax/National Insurance Contributions Class 4 (except PAYE (Pay As You Earn)/National Insurance Contributions Class 1 deductions and amounts deducted from payments to sub contractors)

     

  • If payable in one sum:
    1 January in the year of the assessment.
  • If payable in two instalments (Cases I and II Schedule D):

First instalment - 1 January in the year of assessment for which tax is payable.


Second instalment - 1 July next following the end of the year of assessment for which the tax is payable.

Capital Gains Tax

1 December next following the end of the year of assessment for which the tax is payable.

Income tax charged at a rate on income

  • from which income tax has been deducted
  • from, or on which, income tax is treated as having been deducted or paid
  • income chargeable under Schedule F. (Other than under Section 203 Income and Corporation Taxes Act 1988)

1 December next following the end of the year of assessment for which the tax is payable

Income Tax and Capital Gains Tax under Self Assessment (for years 1996-97 and later, or, in the case of certain partnerships, 1997-98 and later)

Tax

Due dates

Income tax/Class 4 National Insurance Contributions (except PAYE/Class 1 National Insurance Contributions deductions and amounts deducted from payments to sub contractors).

 

  • First payment on account 31 January in the tax year for which the tax is payable.

  • Second payment on account 31 July next following the end of the year of assessment for which the tax is payable.

  • Balancing payment 31 January next following the end of the tax year for which the tax is payable.

Capital Gains Tax

31 January next following the end of the tax year for which the tax is payable.

Petroleum Revenue and Tax

Tax

Due dates

Assessed Taxes (Schedule 2 paragraph 10(1) Oil Taxation Act 1975).

Two months after the end of the chargeable period to which the tax relates.

Payments on Account (Section 1(1)(a) Petroleum Revenue Tax Act 1980).

Two months after the end of the chargeable period to which the tax relates.

Instalment Payments (Paragraph 2 Schedule 19 of the Finance Act 1982).

The last day of the month in which the payment is due.

Petroleum Royalty.

Two months after the end of the chargeable period to which the royalty relates.
Other Taxes

Tax

Due dates

Inheritance tax

 

  • On death
  • On lifetime gifts not chargeable when made:

Six months after the end of the month in which the death occurs or, as regards tax paid by personal representatives on delivery of their account, on the date of delivery of that account, if earlier.

  • On lifetime gifts chargeable when made
  • On occasions of charge under Chapter III Part III Inheritance Act 1984:

Six months after the end of the month in which the chargeable transfer is made or if the transfer is made after 5 April and before 1 October in any year, at the end of April in the next year.

Income Tax on payments by companies which are relevant payments (Section 350(4) ICTA 1988).

14 days after the end of the return period.

In relation to the chargeable period ending 30 June 1983 only:

 

  • Assessed tax: 31 October 1983.

  • Payments on account payable by instalments (Paragraph 2(1) Schedule 19 Finance Act 1982):
    Two months after the end of the chargeable period, or the end of the month in which the payment is due, if later.

Please note:

The deemed due date does not change if for any reason:

  • HMRC makes a late assessment
  • you do not need to pay your Scheduled liability until later (for example on the settlement of a tax appeal)

Frequently Asked Questions

What is the minimum deposit I can make?
The first Deposit you make must be for a minimum sum of £500. Any further Deposit must be either:

  • for at least £250
  • enough to bring the amount you hold on Deposit up to at least the £500 minimum, if the amount you hold has dropped below that sum

What is the maximum deposit I can make?
There is no maximum.

Can I purchase a CTD in a Company name?

Yes but only if the Certificate is intended for use against a tax liability listed in the Schedule (link to section) within the CTD Prospectus. CTDs can no longer be purchased by a company for use against Corporation Tax or Advanced Corporation Tax as they are no longer listed in the Schedule.

I wish to purchase a CTD in the name of a trust or deceased's estate. Can I do this and what information do you require?.

Yes, you can purchase a CTD in the name of a trust or estate. To purchase a CTD please see Making deposits. We will also require

  • the name of the trust and all associated trustees
  • the name of the deceased and all associated executors

Please provide us with this information in writing when you purchase the CTD.

I have lost my CTD, what do I do?.

If you are unable to locate your CTD and you are fully satisfied that it has been lost, please write to the CTD Team (address above) confirming the CTD has been mislaid. Once the CTD Team has your written notification that the CTD has been lost they will issue you or your agent with an Indemnity Form to complete and return which can be used in one or more of the following three ways:

  • to request allocation of the deposit against tax
  • to request repayment of the deposit
  • to request a duplicate CTD be issued

This Indemnity Form cancels the original CTD and voids it from further use. If the original CTD is eventually found it should be returned to the CTD Team for destruction.

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I want to submit my CTD for repayment, what do I do?.

You should submit the CTD, together with a covering letter confirming you require it to be repaid, to the CTD Team (address above). If the repayment is to be made payable to anyone other than those named on the CTD written authority from those named on the CTD is required.

  • if the repayment is likely to amount to £100,000 or more (including any interest) we can make repayment directly into your chosen bank account via CHAPS
  • if the repayment is likely to be less than £100,000 we will issue a Payable Order to your chosen payee

Is interest taxable and if so, is it paid 'gross' or net' of tax?

Yes, interest on a CTD is treated as taxable income and it is paid before tax or 'gross'. You must therefore declare all interest received on a CTD within a specific tax year on your annual tax return. Each time you use a CTD, or part there of, the CTD Team will issue a Form 822 to you or your agent confirming the exact amount of interest paid.

I am in the process of completing my tax return for this financial year. Do I need to make an allowance for interest accrued on my CTD?.

Interest is only added to a Certificate of Tax Deposit at the time it is used. If your CTD has not been used during the Tax Year concerned, then there will be no interest to declare.

When a Certificate of Tax Deposit is used a Form 822 is issued to you or your Agent confirming the details of allocations/repayments made and stating any interest that has been credited to the CTD's value. This interest figure would need to be shown on the relevant tax return.

The names of the trustees or executors have changed since purchasing the CTD. What do I do?.

We require written authority to change or amend the names of trustees or executors on a CTD. The written authority must be signed by all those named on the CTD and it must confirm that all those named on the CTD are happy for the amendment to take place.

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I may owe tax on an old tax liability, which is subject to an HMRC investigation and I want to purchase a CTD to protect myself should the investigation go against me. Where do I stand with regard to the accrual of interest, both on the CTD and on the possible tax liability?.


If the tax liability included within the investigation has an original deemed due date that is prior to the date of purchase of the CTD, no interest will be added to the CTD's value. However, in these instances the interest on such liabilities would only be charged up to the CTD's purchase date on that element of the tax that is covered by the CTD. The CTD would therefore help to restrict the amount of interest that would be payable.

In those cases where the tax liability will have an original deemed due date that is later than the purchase date of the CTD, interest will be added to the CTD's value. This interest will be calculated at the 'tax' rate and will run from the purchase date of the CTD to the original deemed due date(s) of the tax that is under enquiry. The element of the tax that is covered by the CTD will be treated as being paid on its due date and will therefore not attract late payment interest.

I have a CTD and want to use it to pay my wife's/husband's tax. Can I do this?.

CTDs are not transferable. However, should the Certificate holder wish to use their deposit against another party's tax, they can do so but the CTD will be treated at the 'cash' rate for interest purposes. The Certificate holder will be required to submit such a request in writing to the HMRC CTD Team.

Providing the CTD was purchased before the due date of the tax, the CTD Team will calculate any 'cash' rate interest between the date of the CTD and the due date of the tax and this will be added to the CTD's value. The element of the tax that is covered by the CTD will be treated as having been paid on its due date and will therefore not attract late payment interest.


If the CTD was purchased after the due date of the tax the CTD will only be applied at face value and will have no interest added to it. The element of the tax that is covered by the CTD will be treated as having been paid at the CTD's purchase date and will therefore only attract late payment interest to this date.

In both cases the CTD Team will transfer the deposit and any applicable interest directly against the requested tax liability.

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I have purchased a CTD and now find that I do not need the full value invested. What are my options?.

If you are using the CTD against a tax liability and a balance will remain unused, you can request that the balance be repaid to you at the same time the CTD is being processed.

Alternatively, you can write to the HMRC CTD Team at anytime to request either part or full encashment of a CTD. When requesting part encashment of a CTD, a new CTD will be issued for the remaining balance and this will bear the same original purchase date as the CTD you have forwarded for encashment.
For both examples, please refer to 'Withdrawals for Cash'.

I have purchased a CTD and now find that it is not sufficient to cover my tax liabilities? Where do I stand and what further options are open to me?.

You should contact the HMRC CTD Team to obtain the true value of your CTD as, dependent on the due date of the tax liability, interest may be added to its value. You should then arrange for any shortfall on the tax liability to be paid immediately in order to keep any interest bill to a minimum.

If the tax liability is still under enquiry but you are aware that it will be higher than first expected, you could purchase a further CTD in order to cover the additional tax that will arise. This would help to keep any final interest bill to a minimum.