CT61 is the return a UK company uses to report and pay HMRC the Income Tax it has deducted from certain payments, such as yearly interest, royalties and annuities. The case most small companies meet is interest on a director's loan: the company pays the director the interest less 20% and sends that tax to HMRC on a CT61. Each return, and the tax, is due 14 days after the end of its quarterly return period.
Everything below comes from GOV.UK's CT61 page, HMRC's CT61 notes and the GOV.UK director's loans guide, as of October 2026.
When a company needs one
GOV.UK says that a company making recurring payments generally makes them after deducting Income Tax at the basic rate, currently 20%. HMRC's notes say you send a CT61 for any return period in which the company has:
- deducted tax from an annual payment, interest or an alternative finance payment it has paid
- received 'manufactured' interest from abroad
- deducted tax from a relevant distribution
Nil returns aren't required. If you've nothing to enter in Parts 1, 2 or 3, you don't send one.
Payments that carry the deduction
HMRC's notes list the payments a company deducts basic-rate tax from. The main ones:
- yearly interest, other than interest paid to a UK bank
- alternative finance payments
- interest distributions by UK authorised unit trusts and open-ended investment companies
- the income element of purchased life annuities
- certain annuities and other annual payments, and certain royalties
- payments under non-charitable deeds of covenant
- certain payments within five years of a demerger, and distributions by unauthorised unit trusts
If the basic rate changes, the notes say to use the rate in force on the date the payment is made.
Payments you don't deduct tax from
The notes list two situations where the basic-rate deduction falls away even for the payment types above:
- the payment goes from a company to another company that's UK resident, or that trades in the UK and pays UK Corporation Tax on the income
- the payment goes to one of the tax-exempt bodies listed in section 936 of the Income Tax Act 2007, such as charities, local authorities, approved pension funds and government departments
Donations to charities and interest on quoted Eurobonds are outside the deduction altogether.
The director's loan case
If you lend your own company cash and charge interest, GOV.UK treats that interest as a business expense for the company and personal income for you. The company has to:
- Pay you the interest minus Income Tax at the basic rate of 20%.
- Report and pay that tax to HMRC every quarter on a CT61.
- Leave you to report the interest on your personal Self Assessment return.
This catches people out because the company feels like 'yours'. It isn't the same legal person, so interest it pays you is treated like interest paid to anyone else. The director's loan account guide covers the other direction, when you borrow from the company.
Return periods and the 14-day rule
Return periods are fixed by law and are usually three months, ending on the last day of March, June, September and December. A company whose accounting period ends on one of those dates gets four equal quarters. If it doesn't, one quarter is split in two.
| Accounting period | CT61 return periods |
|---|---|
| 12 months ending 30 June | 1 July to 30 September; 1 October to 31 December; 1 January to 31 March; 1 April to 30 June |
| 12 months ending 20 May | 21 May to 30 June; 1 July to 30 September; 1 October to 31 December; 1 January to 31 March; 1 April to 20 May |
Where a return is needed, the company sends it and pays any tax due within 14 days after the end of the return period, without waiting for a demand. HMRC charges interest on tax paid late and may charge penalties if the return is late or wrong. Building societies use different quarter dates.
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Getting the form
You can't download a CT61. GOV.UK says to request it online, and HMRC's notes ask you to use the latest return it sends and destroy older ones, paying through the payslip on the notice. A limited liability partnership doesn't use the CT61 at all: it writes to Self Assessment, HM Revenue and Customs, BX9 1AS, saying it's an LLP, quoting its Unique Taxpayer Reference and giving details of the payment and the tax deducted.
Setting off tax the company has suffered
If the company also receives interest or annual payments with tax already taken off, Part 5 of the return lets it set that tax against the tax it owes on payments it makes. Any excess carries forward to later periods in the same accounting period, or back to earlier ones with a repayment claim. Entries in Part 5 alone don't need a return unless you're claiming a repayment.
Payments to non-residents
Interest and royalties paid abroad can carry a lower rate under a double taxation treaty, but for interest the company needs HMRC's authorisation first. For royalties, a company that reasonably believes the recipient is entitled to treaty relief can pay at the treaty rate without it, and also completes the CT600H supplementary pages.
My verdict
If your company pays you interest on a loan, it needs a CT61 routine: deduct 20%, pay the director the rest, and file and pay within 14 days of each quarter end. Request the form before the first payment, not after. It sits alongside the company's own CT600 return, not instead of it.
Frequently asked questions
What is a CT61 return?
It's the return a UK company uses to report and pay HMRC the Income Tax it has deducted from payments such as yearly interest, royalties, annuities and alternative finance payments.
When is a CT61 due?
Within 14 days after the end of each return period. Periods usually end on the last day of March, June, September and December.
Do I need a CT61 if my company pays me interest on a director's loan?
Yes. GOV.UK says the company must pay you the interest less basic-rate Income Tax of 20% and report and pay that tax every quarter using form CT61.
Is a nil CT61 return needed?
No. HMRC's notes say nil returns aren't required.
Can I download the CT61 form?
No. You request it online from GOV.UK. LLPs don't use it and write to HMRC instead.
