If your Director’s Loan Account is overdrawn at your company’s year-end and the loan isn’t repaid within 9 months and 1 day of the end of your accounting period, your company may have to pay a Section 455 tax charge. ⏳

For loans made from 6th April 2026, the tax rate is 35.75% of the outstanding balance. The tax can usually be reclaimed once the loan has been repaid, subject to HMRC rules.

If you’re unsure about your Director’s Loan Account or want to avoid an unexpected tax charge, contact our team. 📞