Welcome to the AccoTax Help Centre

Search for answers to your questions by entering keywords below, or scroll down to look through our knowledge base.

How to reclaim a tax charge of section 455/S455

Updated on October 19, 2026

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.

Tags:

What are your feelings
Call Us Now Live Instant Quote Request A Callback

Request A Callback