Form CT61: Completing the Return, Deadlines, and Paying HMRC

Form CT61 is the quarterly return a UK company uses to report income tax it has deducted at source from payments such as yearly interest, patent royalties, and manufactured payments, and to hand that tax over to HMRC. If your company withheld tax on any qualifying payment during a return period, you must file the CT61 and pay the tax within 14 days of the period ending. The form is not available as a download. You request a paper copy from HMRC, complete it by hand, and post it back.¹

Which Payments Trigger a CT61

Section 874 of the Income Tax Act 2007 requires a company paying yearly interest arising in the UK to deduct income tax at the basic rate before releasing the funds.² The same obligation extends to patent royalties, alternative finance payments, manufactured payments, and relevant distributions.¹ The basic rate is 20 percent.³

A worked example. If your company pays £10,000 in yearly interest to a private lender, you withhold £2,000, pay the lender £8,000, and send the £2,000 to HMRC through the CT61.

The word “yearly” matters. Yearly interest is an obligation that recurs, or is capable of recurring, over more than 12 months. A one-off payment on a brief loan typically does not qualify as yearly interest and sits outside the regime. Bank and building society interest paid in the ordinary course of business is also generally outside CT61, because those institutions operate under their own reporting rules.

One boundary worth flagging: limited liability partnerships must not use Form CT61. An LLP instead writes to HMRC at Self Assessment, HM Revenue and Customs, BX9 1AS, quoting its Unique Taxpayer Reference and giving details of the payment and tax deducted.¹

When You Do Not Have to Withhold

Not every interest or royalty payment attracts the 20 percent deduction. Under UK domestic law, if the beneficial owner of the interest is another UK-resident company, or a UK permanent establishment that will be taxed on the income as part of its trading profits, you can pay gross. A similar exemption covers royalties where the beneficial owner is a UK-resident company.

Royalties do not need prior HMRC clearance to be paid gross. You can do so if you reasonably believe at the time of payment that the exemption applies. The risk sits with the payer. If HMRC later disagrees, your company becomes liable for the tax that should have been deducted, plus interest, and potentially higher penalties.

How to Get the Form

There is no downloadable PDF. Request a paper copy through HMRC’s online form on gov.uk, and HMRC will post it to the address held for your company.¹ Confirm your registered details are current before making the request, and allow lead time for delivery, especially close to quarter-end.

While you wait, pull the records you will need: the gross amount of each qualifying payment during the quarter, the tax deducted, the net amount paid, and the recipient’s name and address. Every figure on the CT61 should tie back to your ledger for the period.

Completing the Return

The CT61 is divided into parts by payment category, so it helps to sort your quarter’s payments by type before you start.⁴

Parts 1 to 3: Payments You Made

Report the gross amount of yearly interest or royalties in Box 3 and the tax deducted in Box 4. Interest paid by banks, building societies, and other deposit-takers goes separately in Boxes 7 through 10. If you paid royalties to a non-resident at a reduced treaty rate, or relied on the Interest and Royalties Directive to pay without deducting, tick the box below Boxes 3 and 4 to flag the procedure.⁴

Part 5: Set-Off for Tax Suffered on Payments You Received

If your company itself received annual payments or interest from which tax was already deducted by the payer, Part 5 lets you set that tax off against what you owe. The figures go in Boxes 26 and 27.⁴

Box 22: What You Owe

Box 22 is the bottom line. Whatever sits there is the amount your company must pay HMRC within 14 days of the end of the return period. If the Part 5 set-off exceeds what you owe, claim a repayment in Box 30.⁴ You will also complete Form CT600H, the supplementary pages to your Company Tax Return, giving details of the payments made in the period.

Return Periods and the 14-Day Deadline

CT61 return periods are quarterly, ending on 31 March, 30 June, 30 September, and 31 December.⁴ The return, and payment of the tax in Box 22, are both due within 14 days after the period ends.⁵

If your accounting period does not end on one of those four quarter dates, the standard three-month period splits into two return periods so that one always ends on the same date as your accounting period. A short accounting period falling entirely inside one quarter uses the accounting period itself as the return period.⁴

You do not have to wait for HMRC to prompt you. The obligation is to deliver the return within 14 days of any period in which a qualifying payment was made, even without receiving a notice.⁵

How to Pay HMRC

The tax shown in Box 22 goes to the HMRC Shipley accounts office. You can pay by online banking, telephone banking, BACS, or CHAPS using:

Sort code: 08 32 10
Account number: 12001020
Account name: HMRC Shipley

Quote your CT61 payment reference on every payment. Without it, HMRC cannot allocate the funds to your withholding tax account. The CT61 reference is separate from your Corporation Tax reference, so using the wrong one causes the same allocation problem.

Post the completed paper form to the address printed on the form. A tracked service is worth the small cost, since you need proof it arrived inside the 14-day window.

Cross-Border Payments and Treaty Relief

When your company pays yearly interest or royalties to a non-UK-resident recipient, the default is still to withhold at 20 percent. Double taxation treaties between the UK and many other countries reduce or eliminate the deduction, but relief is not automatic. The overseas recipient must apply to HMRC using the DT Company form, and HMRC may then authorise your company to pay without deducting, or at the reduced treaty rate.⁶

p>Even where a treaty brings the rate to zero, you still report the gross payment on the CT61 and tick the relevant box to show the treaty was applied. The filing obligation does not disappear because the tax due is nil.

Penalties and Interest for Getting It Wrong

Failing to file the CT61 on time exposes your company to penalties under TMA 1970 Section 98. A tribunal can impose an initial penalty of up to £300, and if the failure continues, HMRC can add a daily penalty of up to £60 for each day the return remains outstanding. The daily penalty stops once the return is filed.⁵

If the company failed to file because it incorrectly believed an exemption applied, and HMRC decides the belief was not reasonable, the penalty ceilings jump to £3,000 for the initial penalty and £600 per day.⁵ Getting the exemption analysis wrong can become expensive fast.

Late payment of the withheld tax attracts interest that accrues daily from the statutory due date until HMRC receives the money. As of January 2026, the late-payment interest rate for corporation tax liabilities is 7.75 percent per year. On top of interest, a company that failed to withhold in the first place can be held liable for the full amount that should have been deducted, meaning the company pays the tax out of its own pocket rather than the recipient’s.

1
GOV.UK. Corporation Tax: Return of Income Tax on Company Payments (CT61)
2
LexisNexis. Income Tax Act 2007 – Section 874 Duty to Deduct From Certain Payments of Yearly Interest
3
GOV.UK. Income Tax Rates and Personal Allowances
4
GOV.UK. Notes on Completing Your CT61 Return
5
GOV.UK. Enquiry Manual EM8051 – Companies: ITA07 Part 15 Chapter 15: Notifying Chargeability
6
GOV.UK. Claiming Double Taxation Relief for Companies and Other Concerns