Directors loans are transactions where a director borrows money from their own company. These loans can be used for various purposes, such as personal expenses or investments. Directors loans however have specific tax implications.

S455 tax which is chargeable at 33.75% when a director's loan is not repaid within nine months and one day after the end of the accounting period for any loans made after 6th April 2022. This tax is designed to prevent directors from using their companies as a tax-free source of finance.  

S455 falls under the regime of Corporation Tax and was introduced in the Corporation Tax Act 2010.  S455 is repaid along with the rest of the company's Corporation Tax return.  It is worth noting that S455 is a 'temporary' tax in that it can be reclaimed once the Directors loan is repaid in full.  The repayment can be made by the Director paying cash back into the company or if there are sufficient retained profits within the business and the Director is a shareholder, they could pay back all or some of the loan by declaring a dividend to themselves.