Last updated: 19 October 2026
How do you reclaim s455 tax?
You reclaim s455 tax once the director’s loan has been repaid, released or written off. The relief isn’t given immediately: it becomes due 9 months and 1 day after the end of the accounting period in which the loan was repaid. If the repayment happens within the same period that s455 was due, you claim on the CT600A supplementary page of that period’s return. If it happens later, you make a separate claim, usually online through form L2P or by letter, within 4 years of the end of the accounting period in which the repayment was made.
How s455 works
| Step | What happens |
| Loan to a participator outstanding at year end | Potential s455 charge |
| Still unpaid 9 months after year end | 35.75% charge (33.75% for loans made before 6 April 2026) payable with corporation tax |
| Loan repaid later | Relief claimed |
| Relief date | 9 months and 1 day after the end of the period of repayment |
Making the claim
- Same return: if repaid before the corporation tax return is filed but after 9 months, include it on CT600A Part 3
- Later periods: use the online L2P form (Loans to participators repayment claim) or write to HMRC with details
- Time limit: 4 years from the end of the accounting period in which the loan was repaid
Example
Bright Ltd has a 31 March year end. At 31 March 2025, its director owes £40,000. It isn’t repaid by 31 December 2025, so Bright pays s455 of £13,500 with its corporation tax. The director repays the loan in June 2026, in the year ending 31 March 2027. Bright can reclaim £13,500, but relief isn’t due until 1 January 2028, 9 months and 1 day after 31 March 2027. It submits the claim with its 2027 return or on form L2P.
Repaying by dividend or bonus
Clearing the loan with a dividend or bonus counts as repayment, but the dividend or bonus is taxed on the director. A formal release or write-off also triggers relief, but the director pays income tax on the amount as a distribution.
Interest on repayments
HMRC doesn’t pay interest on s455 repayments until the relief date, so cash is tied up for a long time. It’s often better to clear loans before the 9-month deadline.
Anti-avoidance rules
Repayments of £5,000 or more followed by new borrowing of £5,000 or more within 30 days are matched, so relief is denied. Loans over £15,000 are also caught where there was an intention to redraw.
Common mistakes
- Expecting an immediate refund on repayment
- Missing the 4-year claim window
- Not using CT600A correctly
- Bed and breakfasting loans and losing relief
Records to keep
Keep the loan account, bank evidence of repayment and dividend vouchers or board minutes.
Frequently asked questions
Can s455 be offset against corporation tax?
It can be set off in HMRC’s systems once due.
Does s455 apply to non-close companies?
No.
Is s455 a cost in the accounts?
It’s shown as a tax asset recoverable.
What if the company closes?
Make the claim before the company is dissolved, as relief is lost afterwards.
Related: NIC on a director’s loan over £10,000, writing off a director’s loan and directors’ loan tax charge.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with director’s loans and s455. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
