S455 director's loan bridge calculator

What this calculates

Three numbers. First, your deadline: 9 months and 1 day after the end of the accounting period in which the loan was made, the date the S455 charge crystallises on whatever is still outstanding. Second, your exposure: the S455 rate for the date the loan was made (35.75% from 6 April 2026) times the overdrawn balance.

Third, the cost of bridging: a short-term facility (interest plus arrangement fee) that buys the time to clear the loan account properly before the deadline, so no S455 charge arises at all.

The honest framing matters: S455 is refundable once the loan is eventually cleared, so it is not a sunk cost. What it is, is a third of the balance leaving the company and sitting at HMRC for a long time. The refund can't arrive before 9 months and 1 day after the end of the accounting period in which you repay the loan, claimed on form L2P. The real comparison is bridge interest (sunk, but small) against that cash lock-up plus the company's liquidity position.

How it's calculated

Two costs off the same overdrawn balance, plus two dates:

• S455 charge = balance x the rate for the date the loan was made: 35.75% from 6 April 2026, 33.75% from 6 April 2022 to 5 April 2026. Refundable under section 458, but not before the deadline that follows repayment.
• Bridge cost = (balance x monthly rate x term months) of interest, flat, plus (balance x arrangement fee %). This is sunk and never refunded.
• Deadline = 9 months and 1 day after the company year-end in which the loan was made. Anything still outstanding on that date is charged.
• Earliest refund = 9 months and 1 day after the end of the accounting period in which the loan is repaid, claimed on form L2P.

The comparison sets the sunk bridge cost against the S455 charge on the balance leaving the company and locking up at HMRC until that refund date. Separately, a balance over £10,000 held interest-free creates a director benefit in kind at the 3.75% official rate whichever route you take.

Worked example: £50,000 overdrawn, year-end 31 December 2025

• S455 deadline: 1 October 2026. The loans were made in that accounting period, before 6 April 2026, so the balance still outstanding on that date is charged at 33.75%. (A loan made on or after 6 April 2026 is charged at 35.75%: £17,875 on £50,000.)
• S455 exposure: £16,875, paid with the Corporation Tax bill.
• If the loan is then repaid during the following accounting period (the year ending 31 December 2026), the earliest HMRC refund date is 1 October 2027, a year after the charge was paid. Slip repayment into the year ending 31 December 2027 and the refund moves to 1 October 2028.
• Bridge alternative: a 6-month facility for £50,000 at 1.5% per month with a 2% fee costs £4,500 interest plus £1,000 fee, £5,500 in total, and the DLA is cleared before the deadline so no S455 charge arises.
• £5,500 of sunk financing cost against £16,875 locked at HMRC for a year or more, plus the working-capital strain of finding it by 1 October.

Whether the bridge wins depends on your reserves, the dividend headroom and how soon the director can genuinely repay. That is an accountant conversation; the calculator gives you the numbers to take into it.

### S455 exposure at 33.75% (loans made 6 April 2022 to 5 April 2026) vs a 6-month bridge at 1.5% per month with a 2% arrangement fee

| Overdrawn DLA | S455 charge (refundable, slowly) | 6-month bridge cost (sunk) | Bridge cost as % of balance |
| --- | --- | --- | --- |
| £25,000 | £8,438 | £2,750 | 11.0% |
| £50,000 | £16,875 | £5,500 | 11.0% |
| £100,000 | £33,750 | £11,000 | 11.0% |
| £200,000 | £67,500 | £22,000 | 11.0% |

Source: FundBiz S455 director's loan bridge calculator worked examples

S455 rate 33.75% for loans made 6 April 2022 to 5 April 2026; loans made from 6 April 2026 are charged at 35.75% (HMRC CTM61505, checked 15 September 2026). Bridge cost = balance x 1.5% x 6 months + 2% fee. The S455 charge is reclaimable under section 458 once the loan is cleared, but not before 9 months and 1 day after the end of the accounting period in which repayment happens.

How a bridge actually clears the loan

This is the part that gets people into trouble. Borrowing into the company doesn't, on its own, reduce the director's loan account. The DLA is cleared only when the director repays the money or when the company declares a dividend or bonus to the director that is set against the balance (taxable on the director in the normal way).

Company-level finance helps by funding the cash for that dividend or bonus without draining working capital, or by funding the S455 payment itself if the deadline cannot be met.

The anti-avoidance rules are real. Repaying just before the deadline and redrawing soon after fails: repayments of £5,000 or more matched by new drawings within 30 days are ignored (section 464C), and for balances of £15,000 or more the matching extends further where redrawing was always the intention. Clear the account permanently or plan to pay the charge.

Edge cases

Partial repayment before the deadline. S455 applies only to the amount still outstanding at 9 months and 1 day. Clearing half the balance halves the charge. The calculator assumes the bridge clears the full balance; scale the inputs for a partial plan.

The deadline has already passed. The charge has crystallised for that period. The decision becomes whether to fund the S455 payment (it is due with Corporation Tax, and HMRC interest plus penalties run on late payment) and how quickly to clear the loan to start the section 458 refund clock.

Loan written off instead of repaid. The S455 position unwinds, but the write-off is taxed on the director as a distribution and there can be Class 1 National Insurance. Usually dearer than it looks; take advice.

Benefit in kind runs regardless. Over £10,000 outstanding at any point in the tax year, interest-free, creates a taxable benefit at the official rate (3.75%) even if you beat the S455 deadline.

FAQs