How it's worked out
If a director (or another participator in a close company) still owes the company money nine months after the end of the accounting period, the company pays s455 tax of 33.75% on what is still owed. It's paid with the Corporation Tax, and HMRC repays it after the loan is repaid or written off.
Repayments of £5,000 or more that are borrowed back within 30 days may be ignored by HMRC, so repaying a loan just before the deadline and taking it out again doesn't avoid the tax. Read more in our director's loan and s455 guide.
This calculator gives an estimate for general information. It isn't tax advice. Check the rules on GOV.UK or ask an accountant.
Do this automatically. Munshian Ledger tracks each director's loan account and flags when s455 could apply, free.