Certificates of Tax Deposit
An overview of the now-closed government scheme.
Scheme Closed in 2017
The Certificate of Tax Deposit (CDT) scheme was closed to new applicants on 23 November 2017.
This page provides historical information about the scheme. No calculator is available as it is no longer possible to purchase new certificates. All existing certificates have now passed their expiry date and can no longer be used to pay tax.
What Was the Scheme?
The CDT scheme allowed individuals and companies to deposit money with HMRC and earn interest, which could then be used to pay for future tax liabilities.
How It Worked
You would 'buy' a certificate from HMRC for a minimum of £2,000. This deposit would then accrue interest daily. The key benefit was that if you used the certificate to pay your tax bill, the interest earned was tax-free.
If you decided to cash in the certificate instead of using it for tax, the interest earned was paid out but was subject to income tax.
Why It Was Closed
The government closed the scheme due to very low usage. With interest rates at historic lows, the return offered by the certificates was minimal, making them unattractive.
The rise of digital banking and modern payment methods also made it easier for businesses and individuals to manage their own tax savings, rendering the scheme largely obsolete.
Modern Alternatives
How to manage your tax payments now.
The most common modern approach is for businesses and self-employed individuals to open a separate, high-interest business savings account. Money for upcoming tax bills (like Corporation Tax or Self Assessment) is regularly transferred into this account. This keeps tax funds separate from day-to-day cash flow and earns interest, although this interest is taxable.