How to Manage a Director's Loan Account — Avoiding HMRC Penalties (2026)

A Director's Loan Account (DLA) tracks money taken from or put into a company that isn't salary, dividends, or expenses. Overdrawn DLA (you owe the company money) that isn't repaid within 9 months of the company's year-end triggers S455 tax (33.75% of the overdrawn balance — refundable only when repaid). Beneficial loans above £10,000 are a P11D benefit in kind. This article covers DLA management, the tax implications, and how to clean up a messy DLA.