What is a CT61

Although most banks and building societies do not have to deduct Income Tax from interest payments they make to depositors from April 2016, the same does not apply to others that pay interest.

Consider an owner managed company whose directors had deposited a considerable sum with the company that was credited to a loan account in the company books. Periodically, the company made an interest payment to the directors involved.

When the interest payment was made the company would have to pay 80% to the director and 20% basic rate tax to HMRC. The company would then be required to notify HMRC that the payment had been made and pay over the tax deducted.

The CT61 is the form that would need to be completed. Regular payments would have to be reported and paid quarterly. To ease the red-tape, payments of interest could be made at the end of the tax year in which case only one return would be necessary.

Latest Blog
29
Feb

Government backtracks on Double Cabs Pickups

This update is only with reference to DCPUs with a payload of one tonne or more. DCPU...

Read More
27
Feb

Skills Bootcamps

Skills Bootcamps help you develop new skills that employers are looking for. They are...

Read More
22
Feb

Self-Assessment tax returns 2023-24

We have just passed the filing deadline for the 2022-23 tax year, and any 2022-23 ret...

Read More
20
Feb

Timing in business is everything

In a previous blog post we outlined the importance of reviewing your income before th...

Read More