Director’s loan not repaid within nine months: section 455 tax and CT600A explained

Short version. An overdrawn director’s loan account can leave a close company owing section 455 tax if a reportable loan is still unpaid nine months after its accounting period ends. The company reports this on CT600A and in CT600 box 480, with tax normally payable nine months and one day after the period end. See HMRC’s CT600A guidance and payment due-date rule.

1. What is section 455 tax, and who pays it?

Section 455, often written as S455 or s.455, is a company tax charge on certain loans to participators or their associates. It is separate from Corporation Tax on profits, so a company with no taxable profit can still owe it. It is not an annual charge on the same outstanding loan. See HMRC’s explanation of the charge.

A close company is broadly controlled by five or fewer participators, or by directors who are participators. A participator has a share or interest in the company’s capital or income, such as a shareholder. An associate can include relatives, partners and certain trustees. These are tax definitions, with exceptions and wider rules explained in HMRC’s CT600A definitions.

2. How much is section 455 tax on a director’s loan?

The statutory rate depends on when the loan was made. For a loan made during 2025, the section 455 rate is 33.75%.

Source: HMRC CTM61505, reviewed 13 September 2026. The manual was published on 16 April 2016 and its displayed update is 24 August 2026.

2026 online-service notice. The statutory rate rose to 35.75% for loans from 6 April 2026, but HMRC says its online service will be updated on 6 April 2027. The current filing format still uses 33.75%. A return containing affected loans will need amending after that update, and further tax may be payable. The current online calculation therefore may not show the full statutory liability. See HMRC’s service notice, published 4 March 2022 and updated 13 August 2026, checked 13 September 2026.

3. When is the tax due, and what if the loan is repaid?

The period end is the last day of the Corporation Tax accounting period covered by the return. The normal section 455 payment deadline is nine months and one day later. For a period ending 31 December 2025, that is 1 October 2026. This payment deadline is separate from the return’s filing deadline. See HMRC CTM98210.

A qualifying repayment within nine months of the period end can reduce or remove the charge through section 458 relief. A loan outstanding at the period end can still need reporting on CT600A even when repaid within that window. If repayment happens later, relief is not due until nine months and one day after the end of the accounting period in which repayment happens. The original tax remains payable while you wait. HMRC explains the timing in CTM61610.

Relief needs a claim. A temporary repayment followed by reborrowing can be caught by rules that treat the loan as still outstanding. Releases and write-offs also have conditions and possible separate tax consequences. Read HMRC CTM61600 on repayment relief before relying on it.

4. Which loans go on this return’s CT600A?

For Part 1, identify reportable loans made during this accounting period that are outstanding at its end. A closing director’s loan balance may also contain loans already reported in earlier periods. A75 records the separate total outstanding across all periods.

Whole pounds means no pence in the loan amount fields. Prepare the filing amounts from your records using the applicable guidance. The tax fields carry pounds and pence. See HMRC’s CT600A Part 1 and A75 instructions.

5. What does the calculation look like?

These examples use loans made during 2025, still unpaid after the repayment window, with no relief. Apply 33.75% to the total reportable whole-pound loans and round the resulting tax once to pence.

For example, two £1 borrower rows total £2. Calculating on that total gives £0.68. Rounding a separate tax charge for each borrower could give a different result.

6. What are the common mistakes?

• Charging the closing balance again. Separate this period’s reportable loans from older amounts already reported.
• Entering pence in loan fields. Use prepared whole-pound amounts, while retaining pence in the tax calculation.
• Reversing the direction of the loan. A director lending money to the company is different from the company lending to the director.
• Waiting for the filing deadline. Check the nine-month repayment window and the separate tax payment date.

7. What goes on CT600A and the CT600?

For an unpaid-loan return without repayment relief, the main entries are:

• A5: the indicator for relevant repayments, releases or write-offs before the period end. It does not itself deduct relief.
• A10: borrower names and loan amounts. A15: their total. A20: tax on that total.
• A75: total outstanding across all periods. A80: tax payable, equal to A20 where no relief applies.
• CT600 box 95: CT600A included. Box 480: A80. Box 510: combined tax charge, including section 455.

See HMRC’s CT600A box guidance, published 30 September 2022 and updated 8 April 2026, checked 13 September 2026, and the main CT600 guide.

8. Where do I enter the figures?

In SimpleCompanyTax#Simple CompanyTax, enter your prepared unpaid loan figures in the existing financial step. The service supports CT600A without repayment relief, including supported amendments. Follow how to add director’s loans, preview CT600A and submit for the exact steps, pricing and current limits.

This is general information, not tax or accounting advice.