Director's Loan

Money taken from your limited company that is not salary, dividends, or expenses, essentially lending to yourself from the company. It must be repaid or declared as income.

Directors' loans are strictly monitored by HMRC. Loans over £10,000 not repaid within 9 months of year-end trigger a 32.5% Corporation Tax charge. Many founders fall foul of this unintentionally.

You take £5,000 from your company account for personal use without payroll processing it. This is a Director's Loan. You must repay it within 9 months of your company year-end or face a tax charge.