A director’s loan account records money you take from your company that is not salary, dividend, or a reimbursed expense. If the account is overdrawn — meaning you owe the company money — and that balance is not repaid within nine months and one day of your company’s year-end, HMRC charges Section 455 tax on the outstanding amount. That charge sits on top of your normal corporation tax bill and can be reclaimed only once you repay the loan. Keeping the account in credit, or managing repayments to meet the deadline, avoids the charge entirely.

Director’s loan account tracking is included as part of our bookkeeping and accounts service rather than charged separately. Your monthly fee covers ongoing reconciliation, year-end documentation, and any Section 455 or benefit-in-kind calculations. We will give you a fixed quote during your free initial conversation, based on your company’s size and the volume of transactions involved. No hourly rates, no unexpected additions.

Yes, and it is not an unusual starting point. We often take on clients whose director’s loan account has not been properly tracked for one or more years. We work back through bank statements and company records to reconstruct the account accurately, identify any historic Section 455 exposure, and bring everything up to date. There may be a one-off catch-up fee depending on how much ground needs to be covered — we will tell you what that is before any work begins.

No. There is no minimum term. If you decide Edward Harris is not right for you, you give notice and we hand everything over cleanly. Your accounts, your records, your data — all of it goes with you. We would rather earn your continued business by being useful than hold it through a contract.

There are a few options, and the right one depends on your company’s position at the time. You can repay the balance before the nine-month deadline to avoid the Section 455 charge entirely. Alternatively, you can declare a dividend to offset the overdrawn amount, provided the company has sufficient retained profits. A bonus is another option, though that carries income tax and National Insurance implications. We set out the options with the numbers attached — you make the call with a clear picture of what each route costs.

If your director’s loan exceeds £10,000 at any point during the tax year and the company has not charged interest at HMRC’s official rate, a benefit in kind arises. That means a P11D filing is required and Class 1A National Insurance becomes payable by the company. We assess whether this applies each year and handle the P11D correctly. It is one of the more frequently missed obligations for directors of small owner-managed companies.