Directors Loan Account Explained: Rules, Tax & Repayment

Tax Guides · 10 min read · Updated 2026-03-23

Everything you need to know about directors loan accounts, including Section 455 tax, benefit in kind charges, and the best strategies for repayment.

Written by Krishna, Founder & HMRC-registered tax agent at TaxRoot.

What happens if I cannot repay my directors loan within 9 months?

If your directors loan is not repaid within 9 months and 1 day after the end of your company's accounting period, the company must pay Section 455 tax at 33.75% of the outstanding balance. This is paid alongside your Corporation Tax. The good news is that this tax is refundable…

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