Directors Loan Account Calculator UK
Calculate Section 455 tax at 33.75%, key due dates and refund timelines, plus benefit-in-kind charges on loans over £10,000. Plan your repayment strategy to minimise your tax liability.
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Frequently asked questions
What is Section 455 tax on directors loans?▾
Section 455 (formerly S419) is a tax charge that applies when a close company (typically a director-owned limited company) makes a loan to a participator (usually the director/shareholder) that remains outstanding nine months and one day after the company year end. The company must pay 33.75% of the outstanding loan amount to HMRC.
When is S455 tax due to HMRC?▾
S455 tax is due nine months and one day after the end of the corporation tax accounting period in which the loan was made. For example, if your year end is 31 March 2025, the S455 tax is due by 1 January 2026. This aligns with the corporation tax payment deadline.
Can I get a refund of S455 tax?▾
Yes. If the director repays the loan to the company, HMRC will refund the S455 tax. The refund becomes available nine months after the end of the accounting period in which the loan was repaid. You must claim the refund — it is not automatic.
What is the bed-and-breakfasting rule for directors loans?▾
The bed-and-breakfasting rules (from April 2013) prevent directors from repaying a loan just before the year end and then re-borrowing shortly after. If a loan of more than £15,000 is repaid and a new loan of more than £5,000 is taken within 30 days, the repayment may be matched against the new loan and S455 tax still applies.
What is the benefit-in-kind (BIK) on a directors loan?▾
If a directors loan exceeds £10,000 at any point in the tax year and is interest-free (or below the official rate), the director is treated as receiving a taxable benefit in kind. The BIK is calculated as the official interest rate (currently 2.25%) multiplied by the loan balance. This is reported on form P11D.
What is the official rate of interest for directors loans?▾
The official rate of interest for beneficial loans is currently 2.25% per annum (2024/25 tax year). This rate is set by HMRC and used to calculate the benefit-in-kind charge when a director borrows from their company at less than this rate.
How do I report a directors loan to HMRC?▾
Directors loans are reported in several ways: the loan balance appears on the company balance sheet and CT600 corporation tax return. If the loan is outstanding at year end, S455 tax is reported on form CT600A. Any benefit in kind is reported on the directors P11D and included in the companys Class 1A NIC calculation.
Can I write off a directors loan?▾
A company can write off a directors loan, but this has tax consequences. The written-off amount is treated as a distribution (like a dividend) taxed at dividend rates on the director. The company also owes Class 1 NIC (employers and employees) if the director is also an employee. S455 tax may still apply until the write-off date.
Is there a limit on how much a director can borrow?▾
There is no statutory limit on directors loans, but loans over £10,000 trigger the benefit-in-kind charge. All outstanding loans at year end trigger S455 tax if not repaid within nine months. Large loans also create cash flow issues for the company and can attract HMRC scrutiny.
What happens if I do not repay the directors loan?▾
If the loan remains outstanding, the company pays 33.75% S455 tax to HMRC. The director also faces a BIK charge if the loan exceeds £10,000. If the loan is eventually written off, it is treated as a taxable distribution. HMRC may also investigate whether the loan is genuinely a loan or disguised remuneration.