Director’s Loan Calculator
Understand the tax implications of borrowing from your limited company. Estimate S455 corporation tax charges and Benefit in Kind (BIK) liabilities instantly.
Calculate Your Loan Tax Impact
Enter the loan amount and duration to see the potential S455 corporation tax charge and personal Benefit in Kind (BIK) implications.
Loan & Tax Details
Enter your director’s loan account metrics
Tax Evaluation
Estimated company and personal tax implications
HMRC Director’s Loan Key Rules
Critical thresholds and deadlines for managing a director’s loan account (DLA) in the UK.
| Rule / Threshold | Limit / Rate | Consequence of Breach |
|---|---|---|
| S455 Tax Trigger | 9 months & 1 day after year-end | Company pays 25% (or 19%) tax on balance |
| Benefit in Kind (BIK) | £10,000+ outstanding at any time | Director pays Income Tax; Company pays Class 1A NIC |
| Bed & Breakfasting | £15,000 limit | Repaying & re-borrowing £15k+ within 30 days is ignored by HMRC |
| Loan Write-Off | Any amount | Treated as director’s income (Income Tax + NIC). Not deductible for Corp Tax. |
Director’s Loan FAQ
Everything you need to know about borrowing from your limited company and staying compliant with HMRC.
A director’s loan occurs when a company director takes money out of their limited company that is not classified as salary, dividend, or legitimate expense repayment. It creates a debit balance in the director’s loan account (DLA).
Under Section 455 of the Corporation Tax Act 2010, if a director’s loan is not repaid within 9 months and 1 day after the company’s accounting period end, the company must pay a temporary tax charge equal to the main Corporation Tax rate (currently 25%) on the outstanding balance. This tax is reclaimable by the company once the loan is fully repaid.
If the total director’s loan balance exceeds £10,000 at any point during the tax year, and the company does not charge interest at or above HMRC’s official rate, the outstanding amount is treated as a Benefit in Kind. The director must pay personal income tax on this benefit, and the company must pay Class 1A National Insurance.
If a company writes off a director’s loan, the amount is treated as taxable income for the director (subject to Income Tax and National Insurance). Additionally, the company cannot claim the written-off amount as a deductible business expense for Corporation Tax purposes.