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Definition
The director's loan account tracks amounts a director takes from or lends to the company outside normal pay. If the director owes the company, it is overdrawn; if the company owes the director, it is in credit. An overdrawn account carries tax rules.
In plain terms
It is the running tally of who owes whom between you and your company. Dip into company money that is not pay or dividends and it lands here.
Why it matters for your company
An overdrawn account unpaid within nine months of year end can trigger a S455 charge, and a loan over £10,000 a benefit-in-kind. Keep it documented. See business loan vs director's loan.
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