<p>There are various ways to repay a <a href="https://www.goforma.com/small-business-accounting/what-is-directors-loan-account" target="_blank">director's loan</a>.<br></p><ul><li>Dividend: A dividend can be declared, and the money can be used to pay off the loan instead of being transferred to the director's personal account. </li><li>Cash repayment: A repayment is made by transferring money into the company account.</li><li>Expenses or salary: The loan can be paid off using other money to the director, such as the director's salary or expense reimbursements. <br></li></ul>
Accountant For A Limited Company
How do I repay a Directors' loan account?
A director's loan account is repaid by cash transfer from the director, by offsetting with a declared salary or dividend, or by formally writing off the balance. Repayment within 9 months and 1 day of the company's year end avoids HMRC's 33.75% section 455 corporation tax charge.
