The mistakes that cost the most
- Not repaying in time. An overdrawn balance not cleared within 9 months and 1 day of the year end triggers a temporary corporation tax charge of 33.75%.
- Crossing £10,000. A loan over £10,000 at any point is a benefit in kind, with tax and reporting unless you pay interest at the official rate.
- Poor records. If you cannot show what you took and repaid, the account becomes impossible to manage and defend.
- Taking too much, too casually. Dipping into company funds without recording it leads to a surprise overdrawn balance.
- No repayment plan. Without profits to vote a dividend or bonus, clearing the balance before the deadline can be difficult.
Loan account creeping overdrawn?
The s455 charge and benefit in kind rules catch many directors. TaxTune tracks your loan account, warns you before deadlines, and plans repayments so you avoid the charges.
Let us keep your loan account clean
We track what you owe or are owed, plan repayments to avoid s455 and benefit in kind charges, and report it all correctly. Fixed fee.
Frequently asked questions
What is the biggest director's loan mistake?
Letting the account go overdrawn and not repaying within 9 months and 1 day of the year end. That triggers a temporary corporation tax charge of 33.75% of the balance.
What is the s455 charge?
It is the temporary tax the company pays on an overdrawn loan not repaid in time, at 33.75% of the balance. It is refunded once you repay the loan.
What is the £10,000 rule?
A loan of more than £10,000 at any point is treated as a benefit in kind, creating tax and reporting, unless you pay interest to the company at the official rate.
How do I clear an overdrawn loan account?
Repay it in cash, or vote a dividend or bonus if profits allow, before the 9 month and 1 day deadline to avoid the s455 charge.
Do I need to record a director loan?
Yes. Keeping an accurate record of what you take and repay is essential, both to manage the tax charges and to defend the position if HMRC asks.