14/08/2026
🚨 Beware the Overdrawn Director’s Loan Trap! 🚨
Borrowing from your own company seems harmless, but an overdrawn balance can trigger a domino effect of hefty tax bills. And no, you can't simply "write it off"!
If your balance creeps over £10k, you risk personal tax charges and a 15% National Insurance hit for your company. Leave it unpaid 9 months after your year-end, and your business faces a massive 35.75% Section 455 tax bill. Think wiping the slate clean is easier? Writing it off counts as a personal dividend, which triggers heavy personal tax and hidden NI costs.
💡 Pro Tip: Actively track your loan balance on your Xero or FreeAgent dashboard so it never catches you off guard!
Don't leave your cash flow to chance. Send us a message today to map out a clear, tax-efficient strategy for your business. 📩
You can read the full blog on our website: https://hubs.ly/Q04rhZpb0