What is a director’s loan account in the UK?

In a nutshell

The director’s loan account is an account on a company’s books that records money that a director either lends to the company or borrows from the company.

If a director lends money to the company, the company owes them money. If the director borrows from the company, they owe the company.

The tax implications of an overdraw director’s loan account

If the director’s loan account is overdrawn (i.e., the director owes the company money) and the director doesn’t repaid the loan within 9 months of the company’s financial year-end date, the company will be liable to 33.75% of Corporation Tax (as of 2023/24).