16/06/2026
Directors, are you making this quiet tax mistake when lending to your own company?
Most business owners know the rules when taking money out… But when it comes to putting money in, that’s where things go wrong and HMRC is very good at spotting it.
Here’s the issue. If you lend money to your company and charge interest, the company usually must, deduct 20% income tax, pay it to HMRC and report it via a CT61 return.
Miss this step and it’s treated as a failure to operate withholding tax correctly.
Here is a real-world example. A company agrees a £40,000 director loan with 5% interest = £2,000 per year.
What often happens is £2,000 is paid to straight to the director. However, it should be £1,600 paid to the director and £400 to HMRC.
Are you currently charging interest on a director loan? And if so, is CT61 being handled properly?
Amy Weston breaks this down clearly, plus what to do if it’s already gone wrong: https://www.wrightvigar.co.uk/news/director-loans-interest-tax-ct61-rules