Directors Loan Calculator 2026/27
Calculate S455 Corporation Tax, benefit in kind charges, and the true cost of borrowing from your company as a director or shareholder.
Important: Directors loans over £10,000 trigger benefit in kind charges. Loans must be repaid within 9 months of year end to avoid S455 tax.
What is S455 tax?
Section 455 tax is a 33.75% charge on directors loans that remain outstanding 9 months after the company year end. It is refundable when the loan is repaid, but ties up company cash.
How can I avoid S455 tax?
Repay the loan within 9 months of your company year end, or take the amount as salary or dividends instead. Be aware of "bed and breakfasting" rules for repeated borrowing.
What is the £10,000 threshold?
Directors loans under £10,000 are exempt from benefit in kind charges, provided you are not also a shareholder with 5%+ interest, or the loan terms are not unusual.
What is the HMRC official rate?
The official rate for beneficial loans is 2.25% for 2026/27. If you pay interest at this rate or higher, no benefit in kind arises.
Calculator by Waqas Sagar, Tax Expert
Last updated: January 2025