If you owe your company money at the end of its accounting period and do not repay it within 9 months, the company pays s455 tax on what is left. Enter your loan to see the s455 charge, the date it is due, what repaying saves, and any benefit in kind if the loan goes over £10,000.
Overdrawn loan account
A director's loan is money you take from your company that is not salary, a dividend, an expense repayment or money you have previously paid in. If you are a shareholder as well as a director of a close company and still owe it money 9 months after the end of its accounting period, the company pays extra Corporation Tax on the amount outstanding under section 455 of the Corporation Tax Act 2010. The tax is payable the day after that 9-month period ends, which is 9 months and 1 day after the end of the accounting period in which the loan was made. The charge applies to loans made in that period, so older loans that were charged before are not taxed again.
The s455 rate follows the dividend upper rate for the tax year the loan was made, as HMRC's Company Taxation Manual sets out:
| Loan made | s455 rate | On a £20,000 loan |
|---|---|---|
| On or after 6 April 2026 | 35.75% | £7,150 |
| 6 April 2022 to 5 April 2026 | 33.75% | £6,750 |
| 6 April 2016 to 5 April 2022 | 32.5% | £6,500 |
| Before 6 April 2016 | 25% | £5,000 |
The 35.75% rate comes from the Finance Act 2026, which raised the dividend upper rate from 2026/27. On 25 September 2026 the main GOV.UK director's loans guide still quoted 33.75%, which is the rate for loans made from 6 April 2022 to 5 April 2026.
No s455 is due on any part of the loan repaid within 9 months of the end of the accounting period. If you repay later, the company can reclaim the tax, but not any interest charged on it, once the relief is due: 9 months and 1 day after the end of the accounting period in which the loan was repaid, released or written off. The claim must be made within 4 years.
HMRC stops you clearing the loan just before the deadline and taking the money straight back out. If the loan was more than £5,000 and you took another loan of £5,000 or more up to 30 days before or after repaying it, or the loan was more than £15,000 and you arranged another loan when you repaid it, s455 is still due on the original loan. If the company writes the loan off instead, it deducts Class 1 National Insurance through payroll and you pay Income Tax on the amount through Self Assessment.
If you owe your company more than £10,000 at any time in the tax year and pay less interest than HMRC's official rate, 3.75% for 2026/27, the loan is a benefit in kind. The company reports it on form P11D and pays Class 1A National Insurance on it, at 15% for 2026/27, and you pay Income Tax on the benefit.
Under HMRC's normal averaging method, the benefit is the average of the balances at the start and end of the tax year (or on the dates the loan was made or repaid), times the official rate, times the whole months it was outstanding divided by 12, less any interest you paid for the year. HMRC's own example: balances of £26,000 and £25,200 at a 10% official rate give £2,560, and after £762 of interest paid the benefit is £1,798.
Compare taking the money as a dividend with the dividend tax calculator and the dividend vs salary calculator, check the company's own bill with the Corporation Tax calculator, and see what HMRC charges on tax paid late with the late payment interest calculator. The limited company expenses guide covers what the company can pay for.
35.75% for loans made on or after 6 April 2026, because the s455 rate follows the dividend upper rate for the tax year the loan is made. Loans made between 6 April 2022 and 5 April 2026 are charged at 33.75%.
9 months and 1 day after the end of the accounting period in which the loan was made. For a period ending on 31 March 2027 that is 1 January 2028. No s455 is due on any part of the loan repaid within 9 months of the period end.
Yes, once the loan is repaid, released or written off. The relief is due 9 months and 1 day after the end of the accounting period in which that happens, it must be claimed within 4 years, and interest charged on the s455 tax is not refunded.
Yes, if you owe more than £10,000 at any time in the tax year and pay less interest than the official rate of 3.75% for 2026/27. The company reports it on P11D and pays Class 1A National Insurance, and you pay Income Tax on the benefit.
Take the average of the balances at the start and end of the tax year, multiply by the official rate (3.75% for 2026/27) and by the whole months outstanding divided by 12, then deduct any interest you paid. A £20,000 loan outstanding all year gives a £750 benefit.
The company deducts Class 1 National Insurance through payroll, and you pay Income Tax on the amount written off through a Self Assessment tax return. The company can reclaim any s455 it paid on a loan that has been written off or released.
