Taxpayers To Lose Millions In Unclaimed Tax Deposits
Another potential stealth tax ...
Posted by Helen Beaumont on 14/12/2022 @ 8:00AM
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 ...
The Certificate of Tax Deposit scheme means taxpayers could lose millions!
The Certificate of Tax Deposit (CTD) scheme allowed taxpayers to deposit money with HMRC in return for a certificate that could be cashed in later with money being allocated against specific liabilities.
"After reading the detail, I was staggered at the amount of money taxpayers could lose!"
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.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the certificate of tax deposit scheme, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
No unauthorised use, duplication, distribution or modification to any original content contained within this blog is permitted without prior written permission of the author. All other trademarks and registered names are acknowledged.
