Last updated: 14 October 2026
Can you transfer money from your company’s account to your own?
Yes, but every transfer must be recorded as something: salary, a dividend, a repayment of money you lent the company, an expense reimbursement or a director’s loan. A limited company’s money isn’t yours, even if you own all the shares. If you just move money across without treating it properly, it goes on your director’s loan account, which can lead to extra tax for you and the company.
Ways to take money out
| Method | Tax for you | Tax for the company |
| Salary | Income tax and employee NIC through PAYE | Deductible; employer NIC at 15% above £5,000 |
| Dividend | 10.75%, 35.75% or 39.35% above the £500 allowance | Not deductible; paid from post-tax profits |
| Repaying a loan you made to the company | None | None |
| Reimbursing business expenses you paid | None, with receipts | Deductible |
| Director’s loan | None at first; benefit in kind if over £10,000 and cheap | s455 tax at 35.75% if not repaid within 9 months of year end |
| Pension contribution | None | Deductible, if reasonable |
Dividends
Dividends can only be paid from distributable profits. Hold a board meeting, minute the decision and issue dividend vouchers. Paying more than the profits available is an illegal dividend, which shareholders may have to repay.
Director’s loan account
If you take money that isn’t salary, dividend or a repayment, your director’s loan account becomes overdrawn. If it’s still overdrawn 9 months and 1 day after the company’s year end, the company pays s455 tax, refundable when you repay. Loans over £10,000 at any time in the tax year that are interest-free create a benefit in kind, based on the official rate of interest of 3.75%.
Example
Neha runs a design company with £70,000 of profit after corporation tax. She pays herself a salary of £12,570 and transfers £2,000 a month as “drawings” without declaring dividends. At the year end, her accountant converts £24,000 into a dividend, minuted at a board meeting, so her loan account is cleared. Had she not done this, she’d have had an overdrawn loan account.
Keeping it clean
- Use separate business and personal bank accounts
- Record each transfer with a reference
- Declare dividends formally before paying them
- Review your director’s loan account each month
Sole traders are different
Sole traders can take drawings freely, because their business and personal money are the same for tax. They’re taxed on profit, not drawings.
Common mistakes
- Treating the company account as a personal account
- Paying dividends without enough profits
- Forgetting the s455 deadline
If you overdraw
If your loan account becomes overdrawn, repay it before the 9-month deadline, or vote a dividend or bonus to clear it. Repaying and then borrowing again within 30 days can be ignored by HMRC under anti-avoidance rules.
Frequently asked questions
Can I pay personal bills from the company account?
Only if recorded as salary, dividend or a director’s loan.
Do I need an accountant to declare dividends?
No, but you need board minutes and vouchers.
What if I’m the only director and shareholder?
The same rules apply.
Can I lend money to my company?
Yes, and repaying it later is tax-free.
Related: writing off a director’s loan, the director’s loan tax charge and employed or self-employed with a company.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with taking money out of your company. See our limited company 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.
