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. In the filing wizard: Director’s loans and section 455 tax adds a CT600A to this CT600 for prepared loans made in the period and still outstanding at its end, and adds the section 455 tax to the total tax reported.
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Follow the CT600A entry steps →
CT600ABox 480Each return of a long periodWhere you see it: Financial Data › Director’s loans and section 455 tax
Before entering figures, the filing setup questions can set the existing destination and CT600 route for an ordinary limited company. They keep the full accounts dates beside the CT600 dates. You can also continue with the controls below without opening the questions.
Director’s loans and section 455 tax adds a CT600A to this CT600 for prepared loans made in the period and still outstanding at its end, and adds the section 455 tax to the total tax reported.
- The section is optional and appears on Financial Data for active companies. The dormant route has no CT600A section.
- You enter each borrower and the prepared loan amount for this return, in whole pounds. Loans from earlier returns are not entered again. Which loans go on this return
- A qualifying repayment within nine months of the period end is added against the borrower and reduces the tax through CT600A Part 2.
- The review card is then headed Total tax reported. Its amount is Corporation Tax plus section 455 tax.
- A period longer than 12 months has two CT600s. Each has its own + Loans for button and its own loans. Loan amounts are not split by days.
Is this the right guide for you?
Use it if all of these are true
- The company is a close company and lent money to a participator or an associate, such as a director who is a shareholder.
- The loan was made during this accounting period and was still outstanding at its end.
- You have prepared the loan figures from your records.
Do not use it if
- The director lent money to the company.That is not a loan to a participator. It does not go on CT600A.
- The loan was released or written off, or repaid more than nine months after the period end.Use instead: Current scope and limits
- The return is for a dormant company.The dormant route has no CT600A section.
Common mistake: entering the whole closing balance
The closing director's loan account balance can include loans already reported on an earlier return. Only loans made in this period and still outstanding at its end are charged on this return. Chestnut Example Ltd's balance at 31 December 2025 is £15,000, of which £10,000 was lent in this period:
Whole closing balance entered
- Amount of loan
- £15,000
- Section 455 tax at 33.75%
- £5,062.50
- Total tax reported
- £10,762.50
This period’s loans only
- Amount of loan
- £10,000
- Section 455 tax at 33.75%
- £3,375
- Total tax reported
- £9,075
The whole balance can still be reported in the optional A75 field, which does not change the charge. Which amounts belong to this return is for you or your accountant to decide.
More help: Which loans go on this return · HMRC CT600A Part 1 and A75
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%.
| Loan made | Statutory rate |
|---|---|
| Up to 5 April 2016 | 25% |
| 6 April 2016 to 5 April 2022 | 32.5% |
| 6 April 2022 to 5 April 2026 | 33.75% |
| From 6 April 2026 | 35.75% |
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%. HMRC gives amendment instructions for affected returns after that update, and further tax may be payable. Full qualifying repayment relief gives nil net tax at either rate, but HMRC’s notice does not expressly exempt fully relieved loans from amendments to the gross charge and relief disclosures. 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.
| Total loans | Calculation | Section 455 tax |
|---|---|---|
| £10,000 | £10,000 × 33.75% | £3,375.00 |
| £2 | £2 × 33.75% = £0.675 | £0.68 |
| £4,321 | £4,321 × 33.75% = £1,458.3375 | £1,458.34 |
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, enter your prepared loan and qualifying repayment figures in the existing financial step. The service supports CT600A Part 2 for qualifying repayments within nine months, including supported amendments. Read how section 458 repayment relief works. Follow how to add director’s loans, preview CT600A and submit for the exact steps, pricing and current limits.
- Company
- Chestnut Example Ltd
- Accounting period
- 1 January 2025 to 31 December 2025
- Loan made in the period
- £10,000 to Director A, still outstanding at 31 December 2025
- Corporation Tax on profits
- £5,700 on £30,000
The company and all figures on this page are fictional.
Company Profile & Period
- Accounting period
- 1 January 2025 to 31 December 2025
- Trading status
- ActiveThe form starts on Dormant, so make sure you change it. A dormant return has no CT600A section.
Click Next →.
Financial Data
Enter your usual figures first, then open the section.
- Director’s loans and section 455 tax
- Open it
- + Loans for
- Click itThe button shows the return’s dates. For two CT600s there is one for each return.
- Loans repaid, released or written off before the period end (A5)
- No, unless the A5 circumstances applyIt starts at No. It does not deduct repayment relief.
- Name of participator or associate
- Director A
- Amount of loan/benefit
- 10000Whole pounds. The amount outstanding at the period end for a loan made in this period.
- + Add loan repayment
- Only if repaid within nine months of the period end
- Amount repaid after the period end
- For example 10000The prepared qualifying repayment for this borrower and this return.
- Date of last repayment included
- For example 31 March 2026The date of the last repayment included. It must have happened and fall within the nine months.
- + Add another borrower
- For each other borrower
- Total loans outstanding, including earlier periods (A75, optional)
- OptionalThe balance at the period end across all periods. It does not change the charge.
- Calculated section 455 tax
- £3,375 with no repaymentIt shows the rate the HMRC online service applies to the return.
To remove the section for a return, click Remove loans for this return. Then click Next →.
More help: Every CT600A field, and the PDF boxes
Review & file
The card is headed Total tax reported. For Chestnut Example Ltd, with the loan unpaid:
Total tax reported£9,075 .00On taxable total profits of £30,000 at 19.0% · small profits · limits applied £50,000 to £250,000- Preview your documents (free)
- Open the CT600A and the computationWhat to check in the preview
The line under the card describes Corporation Tax on profits. The section 455 tax is added to the amount above it.
This is general information, not tax or accounting advice.
Sample outcome
Related guides
Open the guide that matches your loan.
Looking for a different field or step? See all filing wizard guides →
Official sources
- HMRC CT600A guidance
- HMRC CTM61505: the section 455 charge and rates
- HMRC CTM98210: due date
- HMRC CTM61600: repayment relief
- HMRC CTM61610: relief timing
- HMRC Corporation Tax online service notice
Whether this route matches your filings is for you to decide, yourself or with your accountant.
Example companies and figures are fictional. Field names match the filing wizard as of 12 October 2026.