HMRC makes many announcements, and the majority of these can seem innocuous at first glance. This is certainly the case with a recent HMRC update about the Certificate of Tax Deposit scheme ...
Deposits of £100,000 or more earned daily interest for up to six years and the common use was for tax avoidance schemes where the arguments could take years to complete and the liabilities were high.
The scheme was first introduced in 1973 and closed for new certificates on the 23rd of November 2017. Existing certificates will only be valid until 2023. HMRC will make all reasonable efforts to contact anyone with CTD, but if they can't reach you, then you forfeit the balance.
A recent Freedom of Information request unearthed some startling statistics:
- HMRC held £391,380,382 of deposited, but unallocated monies belonging to taxpayers on 31 October 2022
- There were 3,337 'live' certificates held at this date with an average certificate value of over £100,000
- These monies were deposited with HMRC over 43 consecutive years between 1975 and 2017
- Over 75% of unallocated amounts were deposited during the last two years of the scheme; £165,871,007 in 2016 and £141,110,866 in 2017
- The deposits are held under 2,549 customer references (some held more than one CTD) and the majority of which, 2,372, were held by individuals
It's unrealistic that HMRC will reach everyone due to the passage of time and events like a taxpayer's death, or simply even moving house. But rather than it simply being a stealth tax and lining the coffers of HMRC, surely it should be put towards helping those most in need.
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