Pay your tax bill by Certificate of Tax Deposit
How to pay tax with deposits, get an up to date valuation of your certificate and check how much interest you have earned.
The Certificate of Tax Deposit scheme allowed you to deposit money with HMRC and use it later to pay certain tax liabilities. The date that you bought your certificate is known as the effective date of payment.
Closure of the Certificate of Tax Deposit scheme
On 22 November 2017, HM Treasury gave notice that the scheme would close. This means the Certificate of Tax Deposit scheme closed for new purchases on 23 November 2017.
HMRC will continue to honour existing certificates until 23 November 2023.
You should contact the 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 23 November 2023, you should contact the team as soon as you can to arrange a refund.
After 23 November 2023 we’ll try to repay the balance of any certificate which remains unpaid and unclaimed. If we cannot (for example, because we’re unable to contact the current certificate holder after reasonable effort) we’ll consider the balance as forfeited.
Who can use a tax deposit
Until the scheme closes on 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 a deposit
Until 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 bought in 1993 or earlier can be used
- Petroleum Revenue Tax
- Inheritance Tax
Tax liabilities under investigation by HMRC
You may have made a deposit to hold against tax liabilities that are under investigation by HMRC.
Your deposit helps to stop late payment interest charges on the amount owed while it remains under investigation.
Interest may be added to the value of your deposit depending on when the deposit was made.
If the investigation will end before the scheme closes on 23 November 2023
You will be able to use your deposit to pay a tax liability as normal. 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 should 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 payment on account.
If you are unsure if the dispute will end before the scheme closes on 23 November 2023
You will need to:
- Contact the investigating officer to confirm the position of your case.
- 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 later of either the:
- date that it was bought
- due date of outstanding liabilities
The cover provided against late payment interest will depend on when you bought your certificate and the value of your certificate.
Deposits made before the tax liability payment date
If 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 date. Late payment interest will not be charged on this amount.
Late payment interest will be charged on any remaining tax due that is not covered by the deposit.
Deposits made after the tax liability payment date
If you made your deposit after the date the tax liability was due, late payment interest will apply from the due date of the tax liability to the date the deposit was made.
Late payment interest will be charged on any tax due that is not 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
Interest will be added to the value of your certificate when you use it to pay off a tax liability or withdraw your deposit. You’ll get a letter confirming how much interest you have received when you do.
Contact 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.
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 one 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 if you need more information about rates.
When interest is not due
Since 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.
Making a deposit
Since 23 November 2017, you have not been able to:
- make a new deposit
- top up an existing 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 confirm the order you want them to be paid in. If you do not confirm the order of payment, the oldest liabilities will be paid first.
Send your certificate and instructions to the Certificate of Tax Deposit team. Once the team have it, it will 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 also give the Certificate of Tax Deposit team your bank details, so the balance can be refunded.
HMRC will not leave any balance due as a credit on your tax records.
If your tax liability is more than the value of your certificate
If the value of your certificate does not cover the tax you owe, you’ll need to pay this immediately. This will mean you avoid or reduce late payment penalties and interest charges.
To get an up to date valuation of your certificate (including interest earned) contact the 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 is not transferable, but you can use them to pay another person’s tax liabilities. You can do this by writing to Certificate of Tax Deposit team.
Interest on a deposit used to pay against another person’s tax liability will be at the lower cash rate.
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 with a written request to the Certificate of Tax Deposit team. You must also give bank details of the account you would like the funds paid into, including the:
- account name
- account number
- account sort code
- bank or building society name
If you’re an overseas customer, you should contact the Certificate of Tax Deposit team to 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 working 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
If you have changed your address since you bought your certificate, even if it was some time ago, contact the Certificate of Tax Deposit team. You will need to give:
- your previous address 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, HMRC 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 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)
Send the written authority to the Certificate of Tax Deposit team.
Changes of business name
If your business has stopped trading, or the business name has changed since the certificate was bought, contact the Certificate of Tax Deposit team.
You will need to give:
- the previous trading name of the business
- evidence 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 have lost a Certificate of Tax Deposit
You must write to the Certificate of Tax Deposit team to report a lost certificate. They’ll send you an indemnity form to complete and return.
Once HMRC has issued the indemnity form, your original Certificate of Tax Deposit will no longer be valid. If you do find it, send it to the Certificate of Tax Deposit team who’ll destroy it.
Updates to this page
Last updated 7 November 2023 + show all updates
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The guidance has been updated to explain what holders of deposits need to do if the investigation is unlikely to end before the scheme closes on 23 November 2023.
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The guidance has been updated to explain what holders of deposits need to do before the Certificate of Tax Deposit Scheme closes on 23 November 2023.
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The payment process when withdrawing a tax deposit has changed. Edited chapter 11 'Withdraw a tax deposit' — Repayments will be sent as a credit to your bank account by Faster Payment.
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The postal address to use to request a withdrawal of a tax deposit has been updated.
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Withdrawing a tax deposit updated.
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Changes have been made to the section about how to withdraw a tax deposit.
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The interest calculator tool has been removed and information about how to contact the CTD team has been added.
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Updated with details about the closure of the Certificate of Tax Deposit scheme.
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Petroleum Royalty can no longer be paid with a tax deposit. It has been removed from the section 'Taxes you can pay with your deposits'.
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There has been a change in the amount of time that can be taken to issue your Tax Deposit scheme certificate.
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Timescales added for receiving confirmation letter of your deposit and for the deposit to be allocated to your liability.
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First published.