Rates and HMRC contact details current as at April 2026. CT61 returns are quarterly and the submission deadline is 14 days after the end of the relevant return period. Take independent tax advice for your specific circumstances.
If your company has paid interest to a non-corporate lender, made an annual payment, or paid a royalty out of UK profits, you almost certainly need to file a CT61 return. Below is exactly what the CT61 form is, when a return is required, when it is not, how to complete each section, what happens if you miss the deadline, and the most common scenarios that trigger a CT61 in practice, from director loans to overseas interest.
What is form CT61?
Form CT61 is the HMRC quarterly return through which a UK company reports and pays Income Tax it has deducted at source from certain payments. The most common trigger is interest paid by a company to a lender that is not itself a UK company, but the form also covers annual payments, royalties, and certain other distributions.
The legal basis is Chapter 15 of Part 15 of the Income Tax Act 2007. Where a company makes a “qualifying payment”, it must deduct basic-rate Income Tax (20% in 2026/27) and pay that tax over to HMRC using the CT61 process. The lender or recipient receives the net amount; HMRC receives the tax.
It is not optional. A company that fails to deduct and account for the tax remains liable for it, plus interest, plus potential penalties.
When is a CT61 return required?
A CT61 return is required for any return period in which the company has made one or more of the following payments:
- Interest paid to a non-corporate UK lender (typically an individual, a partnership, or a trust)
- Interest paid to an overseas lender, where no treaty exemption applies and HMRC has not issued a direction to pay gross
- Annual payments such as certain alimony, patent royalties, or copyright royalties paid out of taxed profits
- Royalties paid to a non-UK resident
- Manufactured payments on certain stock-lending arrangements
- Alternative finance returns in some Islamic-finance structures
If no such payments were made in the return period, no CT61 is needed for that period. The obligation is per-period, not standing.
When is a CT61 NOT required?
A CT61 is not required for:
- Interest paid by a company to another UK company (paid gross under the “company-to-company” exemption)
- Interest paid by a company on a bank loan or to a recognised UK financial institution (paid gross)
- Dividends (these go through a different mechanism)
- Salaries and wages (PAYE)
- Payments where HMRC has issued a specific direction allowing payment gross (most commonly to overseas lenders covered by a double-tax treaty)
- Periods in which the company simply made no qualifying payments at all
Common situations that trigger a CT61
Director loans repaid with interest
A common scenario: a director lends money to their own limited company, and the company pays interest on that loan. The director is an individual, not a corporate. The company must deduct 20% Income Tax from each interest payment, pay it over via CT61, and give the director a statement of the tax deducted (the director then offsets that tax against their personal Income Tax bill).
Family loans to a company
Same principle as director loans. A parent lends £100,000 to their child’s company at 5% interest. Annual interest of £5,000 is paid to the parent, the company deducts £1,000 Income Tax at the basic HMRC rate of 20%, pays £4,000 net to the parent, and remits £1,000 to HMRC via CT61.
Overseas lenders
If a UK company borrows from an overseas lender (a US bank, an EU parent, an offshore trust), interest paid is normally subject to 20% UK withholding tax unless reduced or eliminated by a double-tax treaty. Even where a treaty reduces the rate to 0%, the company must usually apply to HMRC in advance for a direction to pay gross. Without a direction, the company must withhold and pay over via CT61.
Patent and copyright royalties
Companies paying royalties out of UK profits may need to deduct tax at source. The rules are nuanced and depend on whether the recipient is in the UK, in the EU, in a treaty country, or elsewhere. CT61 is the reporting mechanism.
CT61 return periods and deadlines
CT61 return periods are fixed by law and align with calendar quarters, regardless of the company’s own accounting year. The four standard return periods are:
- 1 January to 31 March
- 1 April to 30 June
- 1 July to 30 September
- 1 October to 31 December
However, if the company’s own accounting period ends on a date other than 31 March, the return periods align to the accounting period end instead, with a possible “short” final period to bring the cycle back into line.
For each return period in which a qualifying payment was made, the return AND the tax must reach HMRC within 14 days after the end of the return period. For the standard quarter ending 30 June, the deadline is 14 July. Late submission triggers interest and, in repeated cases, penalties.
How to get a CT61 form
The CT61 is a paper form. There is no online filing service for CT61 at present. To obtain a CT61, contact the HMRC CT61 office directly:
- HMRC, Bradford, BD98 1YY
- Phone: 03000 518 371
HMRC will normally send the form along with the explanatory CT61 Notes (often called the “blue book”) once they are aware the company needs to file. If your company has never filed a CT61 before but has made a qualifying payment, you should contact HMRC proactively rather than waiting; the obligation starts from the date of the payment, not from the date HMRC writes to you.
How to complete the CT61 form
The CT61 has two main pages. Page 1 carries the declaration, the return period, and the basic identification details (customer reference, office number, accounting date, company name and address). Page 2 contains the calculation, broken into sections for the different types of payment.
Section-by-section
- Customer reference, office number, accounting date: pre-printed by HMRC on the form they send you.
- Return period: enter the start and end date of the quarter being reported (e.g. 01/04/2026 to 30/06/2026).
- Income Tax on company payments, interest paid, alternative finance payments, manufactured payments and tax on relevant distributions: the main calculation table. Enter the gross amount paid in the period for each category, the rate of tax (normally 20%), and the resulting Income Tax due.
- Less: Income Tax suffered on income received: if your company has itself received payments with tax deducted at source in the same period, you can offset that received-tax against the tax you owe. Enter the gross income received and the tax suffered.
- Net Income Tax payable (or repayable): the bottom-line figure. Positive: you pay HMRC. Negative: HMRC repays you.
- Declaration: sign, date, give your name and capacity (Director, Company Secretary, etc.), and provide a daytime contact number.
Where to send the CT61 form
Send the completed form and a single cheque for the net amount due to:
- HMRC, Bradford, BD98 1YY
HMRC supplies a reply envelope with each CT61 pack. Use that envelope if you have it; the address on the envelope routes the return faster. A payslip is provided on the CT61 notice that should accompany the cheque.
The form and the payment must both reach HMRC by the 14-day deadline. Posting on day 13 may be too late if there are postal delays; we recommend posting at least 5 working days before the deadline, or using HMRC’s online BACS / Faster Payments service for the tax portion while posting the form separately.
What happens if you miss the deadline
If the CT61 return is late, or the payment is late, HMRC will charge:
- Interest on the late tax, running from the day after the 14-day deadline until the date of payment
- Late-filing penalties for persistent late filers (the first late return is usually a warning; subsequent late returns can attract penalties)
- In serious cases, a determination of tax due (where HMRC estimates the liability and demands payment without waiting for the return)
The “false statements can result in prosecution” wording on the form is not decorative. The CT61 is a formal return and deliberate misstatement is a criminal offence.
CT61 and withholding tax: how they connect
“Withholding tax” is the umbrella concept; the CT61 is the UK administrative form for collecting it on payments other than dividends and PAYE income. When you read about withholding tax on UK interest, royalties, or annual payments, the practical reporting and payment vehicle is almost always the CT61.
Where a double-tax treaty reduces the UK rate (commonly to 0% on interest paid to a related foreign company in many EU and US treaties), the reduction does not happen automatically. The UK payer must obtain a direction from HMRC in advance, and until that direction is received the 20% withholding must continue via the CT61 process. The lender can claim a refund later, but the cashflow burden sits with the borrower in the meantime.
Frequently asked questions about the CT61
What is form CT61 used for?
To report and pay Income Tax that a UK company has deducted at source from interest, annual payments, royalties, or other qualifying payments under Chapter 15 Part 15 ITA 2007.
When does a CT61 return apply?
In any return period (calendar quarter, or quarter aligned to the accounting period) in which the company made one or more qualifying payments.
How often do CT61 returns need to be filed?
Quarterly, but only when there is something to report. A period with no qualifying payments needs no return.
Can you submit CT61 online?
No. The CT61 is paper-only as at April 2026. There is no HMRC online filing route. The tax payment can be made via BACS or Faster Payments, but the form itself must be posted.
Where do I send the completed CT61 form?
HMRC, Bradford, BD98 1YY. Use the reply envelope from the CT61 pack if you have it.
How do I get a CT61 form?
Phone HMRC on 03000 518 371. HMRC will issue the form along with the CT61 Notes once they understand the company needs to file.
When is a CT61 not required?
When all interest paid in the period was either company-to-company (paid gross), to a bank or financial institution, or covered by a specific HMRC direction allowing gross payment. Also not required for periods with no qualifying payments at all.
Is interest paid to a director subject to CT61?
Yes. A director is an individual, not a corporate, so interest paid to a director on a director’s loan must have 20% Income Tax deducted and reported via CT61.
What if I made a payment but didn’t deduct tax?
The company remains liable for the tax. Contact HMRC, file the late CT61, pay the tax and accept the interest. The earlier you correct it the lower the cost.
Can the recipient reclaim the tax?
Yes. The recipient receives a statement of tax deducted and can offset that tax against their own Income Tax liability (for UK individuals) or claim a refund via the relevant treaty mechanism (for overseas recipients).
Does Companies House see the CT61?
No. The CT61 is an HMRC return only. It is not filed with Companies House and does not appear on the public company record.
Practical advice for company directors
If you are a director paying yourself interest on a director’s loan, the CT61 process is straightforward but easy to forget. A few practical points:
- Pay interest on a regular schedule (annually or quarterly) so the CT61 obligation is predictable
- Keep a simple register of which quarters had interest payments and which did not, so you know which periods need a return
- Diary the 14-day deadline immediately when you make a payment, with a reminder 7 days before
- If you have overseas lenders, get the HMRC treaty direction in advance; do not wait until after the first payment is due
- Speak to your accountant before lending to or borrowing from your own company; the CT61 obligation is one of several tax interactions to consider, alongside the loan-to-participator rules in CTA 2010 and the benefit-in-kind rules
Speak to a Manchester chartered accountant about your CT61 obligations
If your company has just made its first interest payment to a director, an overseas lender, or another non-corporate, or if you suspect a CT61 obligation has been missed in a prior quarter, get in touch. A short call usually settles whether a return is needed, how to remediate any past omissions, and how to set up a clean quarterly process going forward.
Where else to find help
Authoritative external references on CT61, withholding tax, and the underlying Income Tax provisions:
- HMRC: tax deducted at source on payments to overseas recipients
- HMRC Savings and Investment Manual: deduction of tax from interest payments
- ICAEW technical pages on corporation tax and related withholding