Director's loan accounts
The accounting direction of money owed between a company and its director, before separate tax tests are applied.
The accounting direction of money owed between a company and its director, before separate tax tests are applied.
A beneficial-loan question is separate
Reviewed · Current · Official guidance · Current reviewed treatment; earlier start date not yet established
£10,000
Current GOV.UK guidance warns of a benefit-in-kind branch where a shareholder-director owes more than £10,000 at any time or pays interest below the official rate.
The £10,000 figure is not a section 455 threshold and must not be confused with the separate, conditional £15,000 section 456 exception.
Exceptions and branches
- The detailed benefits-code calculation is outside this slice.
The direction of the balance changes the question
Reviewed · Current · Official guidance · Current reviewed treatment; earlier start date not yet established
An overdrawn director's loan account means the director owes the company; an in-credit account means the company owes the director.
The balance belongs in the annual accounts. Direction must be established before applying a tax branch, and a director is not necessarily a participator.
Exceptions and branches
- Separate real balances cannot always be netted merely for convenience.
When the company owes the director
Reviewed · Current · Official guidance · Current reviewed treatment; earlier start date not yet established
Money a director lends to the company does not create Corporation Tax for the company merely because it was lent.
Interest paid by the company is a separate company expense and personal-income branch with withholding and CT61 administration described by GOV.UK.
Exceptions and branches
- Interest deductibility and connected-party facts need their own review.
Related concepts
Linked from
Sources
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Director's loans — If the loan was more than £10,000. Official guidance.
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Director's loans — Overview; if you owe your company money; if you lend your company money. Official guidance.
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Director's loans — If you lend your company money. Official guidance.
Knowledge version: sterling-knowledge@2026-09-11.7. Last checked 11 September 2026.