Director loan account tax calculator (s455)
If your director loan account is overdrawn and not repaid within nine months and one day of the company year end, the company pays a temporary section 455 tax charge on the balance. The charge is refundable once the loan is repaid, but if the company becomes insolvent the balance is also money a liquidator can pursue you for.
Your s455 charge
If the company is heading for liquidation, remember this balance is money you owe the company that a liquidator will seek to collect. Take advice before you close the company, or get a free review of your situation.
Worked example: change the figures to your own. The rate follows the dividend upper rate for the tax year the loan was made. If the balance built up across these dates, each loan is charged at the rate for the date it was made.
Source: HMRC Company Taxation Manual CTM61505 (35.75% from 6 April 2026, 33.75% from 6 April 2022, 32.5% from 6 April 2016).
Why the loan account matters if closure is on the table
An overdrawn director loan account means you personally owe the company money. While the company is solvent this is mainly a tax issue. If the company becomes insolvent, the overdrawn balance becomes an asset the liquidator must collect.
Common questions
What is the s455 tax rate?
Section 455 charges the company tax on a director loan that is still overdrawn nine months and one day after the company year end. The rate depends on when the loan was made: 35.75% for loans made on or after 6 April 2026, and 33.75% for loans made from 6 April 2022 to 5 April 2026. It is refundable once the loan is repaid.
What happens to my overdrawn loan if the company is liquidated?
The overdrawn balance is an asset the liquidator must collect, and the liquidator can pursue you personally to repay it. You cannot simply write it off. See overdrawn director loan accounts.
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