CTM35050 - Income Tax: accounting for tax deducted from interest etc

Companies (including non resident companies trading from a branch or agency in the UK and local authorities) must deduct income tax by virtue of ITA07/S874 from certain payments of yearly interest and similarly from other payments of the types identified by ITA07/PT15/CH4 to CH10, as listed at ITA07/S847 (2), notably from annual payments and patent royalties.

Companies (and various other entities) making these deductions are obliged to account for the amounts deducted using form CT61. COM23135+ explains how to handle CT61 cases using the SAFE system). Collection is dealt with by ITA07/PT15/CH15 to CH17 - see CTM35100.

Entries on the forms giving aggregated figures of amounts paid or credited and the tax deducted for the return period are acceptable. Dates of payments need not be specified but separate figures should be shown for pre and post 5 April amounts to reflect any change in the tax rate.

The figures in the returns may be reconciled against those in or with the accounts. Entities filing a CT61 should provide a reconciliation of the figures in the CT61 returns with the deductions claimed in the accounts for these items.