The CT61 form is an important document for UK resident companies that are struggling to pay interest on loans. When the company is paying in kind (PIK) or a funding bond, it can use this form to inform their creditor of their taxation decisions.
When filing this form, the company has to decide whether they want to pay their taxes as money or a funding bond. It is important to note that CT61 doesn't provide any relief from taxation and the company must still pay its tax liabilities in full.
It is basically a note to your creditors stating that you are struggling to pay the tax-deducted loan.
When should a CT61 paid?
First day of the tax year, namely 5 April of each year. For paying royalties, interest, etc this deadline is 31 March.
A CT61 should be used when a company is unable to pay the tax deducted from the loan that was issued. The CT61 form can be submitted with other documents related to the loan to inform creditors of the company's taxation decisions.
If you decide to pay the tax deducted by a funding bond, you should send the original funding bond to HMRC's subsidiary RN Ltd.
What information should the CT61 form include?
The CT61 form must include details like the company name, address, and registered number; particulars of money or other property paid out as interest or royalties; tax deducted from such payments, the amount due to be paid over by the company, the definition and elements taken into account when valuing funding bond, the amount of income tax deducted from the interest rate by funding bond, etc.
Once you have completed the CT61 form and all other documents related to the loan, you can submit them to your creditors.
How do I get a CT61 Form?
The CT61 Form is available to download from the Government's website
Is there a penalty for late CT61?
HMRC charges interest on late CT61 submissions. They enforce penalties on inaccurate or late submissions. Although there are some special cases like payments to non-residents and alternative finance payments and receipts like the results caused by double taxation convention between the UK and the company`s resident country.
Conclusion
In conclusion, the CT61 Form is an important document for UK resident companies that are struggling to pay interest on loans. When filing this form, companies must decide whether they want to pay their taxes as money or a funding bond. It should be submitted to the creditor and HMRC's subsidiary RN Ltd., along with other documents related to the loan, before the CT61 due date. CT61 submissions must be accurate and on time to avoid interest charges and penalties from HMRC. The CT61 Form is available to download from the Government's website.
