This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Waive goodbye! Writing off a director’s loan

By Sarah Bradford, June 2021

Sarah Bradford looks at the tax and National Insurance contributions implications of writing off a director’s loan account. 

In a family or personal company scenario, director’s loans can be very beneficial. Where there is a close relationship between the director and the company, it is easy for the boundaries to become blurred; the director may meet company debts personally and the company may pick up the tab for some of the director’s personal liabilities. A director’s loan account is the mechanism for keeping track of these transactions. 

However, where the company is a ‘close’ company (as family and personal companies generally are), there are implications associated with making a loan to a director, and these need to be taken into account. Broadly, a company is a ‘close’ company if it is under the control of five or fewer shareholders. 

This is one of our 2037 Premium articles

To see this article in full and unlock access to our complete library of 2037 articles click 'subscribe & unlock' below:
SUBSCRIBE & UNLOCK

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you for signing up to hear from us!