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How a director's loan works
Money you take from the company that is not salary, dividend or expense repayment goes to your director's loan account. If you owe the company, it is an overdrawn account, which is where the rules bite.
The tax to watch
An overdrawn director's loan not repaid within nine months of year end can trigger a temporary corporation-tax charge (often called S455), and a loan over £10,000 can create a benefit-in-kind. Keep it documented and take advice.
What it means for you
It is a legitimate tool used carefully — not a substitute for proper business funding. For business needs,
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
Is a director's loan legal?
Yes. Companies commonly lend to directors, provided it is properly recorded in the director's loan account and the tax rules are followed. Larger loans may need shareholder approval.
What are the tax risks?
An overdrawn loan unpaid within nine months of year end can trigger a S455 charge, and loans over £10,000 can create a benefit-in-kind. Documentation and timely repayment avoid the pitfalls.
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Can I get finance to pay corporation tax?
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.