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Do You Know What's Sitting in Your Director's Loan Account Right Now?

  • Michael Vasey
  • Jul 25
  • 1 min read

If you're a director of a limited company, chances are you've used the business account like a personal piggy bank at some point. That's where the Director's Loan Account (DLA) comes in. It tracks what you've taken out (or put in) that isn't salary for dividend.

Person reviewing a Director’s Loan Account on a laptop, with a balance sheet showing a negative equity figure, a note reading “To Repay?”, and a phone and notebook nearby — illustrating financial oversight and action planning.

What Is a Director's Loan Account?


It's a record of money you've borrowed from or lent to your company. It's not taxed like salary or dividend - but if you get it wrong there can be consequences.


Why You Should Pay Attention


  • Overdrawn DLA? You could face a 33.75% corporation tax charge under s455

  • Writing it off? If could be taxed as income

  • No record at all? That's a red flag for HMRC


What to Keep Track Of


  • Personal expenses paid by the company

  • Money transferred to yourself outside payroll

  • Loan repayments made to you

  • Any cash you've put into the business to help cash flow


How to Stay on Top of It


  • Keep detailed records - don't rely solely on your accountant

  • Reconcile monthly (or quarterly at minimum)

  • Understand what counts as a loan vs salary vs dividend


Wrap-up


Your DLA doesn't need to be scary - but it does need to be understood. Keeping it accurate protects you and your business.



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