Reclaim s455 Corporation Tax After a Director’s Loan Is Repaid
You may be able to reclaim s455 Corporation Tax where a relevant director’s loan or other loan to a participator has subsequently been repaid, released or written off.
The repayment does not always produce an immediate tax refund. Section 458 relief has its own timing rules, claim deadlines and reporting procedures, and temporary repayments can be restricted by the director’s loan bed-and-breakfasting rules.
When Can a Company Reclaim s455 Corporation Tax?
Where a company has suffered a section 455 charge on a relevant loan to a participator, relief can generally become available when all or part of that loan is subsequently repaid, released or written off.
The relief is provided under section 458 of the Corporation Tax Act 2010. A partial repayment can therefore produce proportionate relief rather than requiring the whole loan to be cleared first.
Reclaiming s455 Corporation Tax is separate from dealing with the director’s personal tax position and any beneficial-loan consequences.
Where relief follows a repayment made after the original s455 charge arose, the company cannot necessarily receive the refund immediately.
Repaying the Loan Does Not Always Mean an Immediate Refund
HMRC states that where a loan is repaid, released or written off after the original section 455 payment point, the relief is generally not due until 9 months and 1 day after the end of the Corporation Tax accounting period in which that repayment, release or write-off occurred.
This means there can be a substantial delay between the date the director repays the company and the date HMRC can actually repay the section 455 tax.
Why the s455 Refund Can Be Delayed
This illustrates the timing rule only. The actual position depends on the company’s accounting periods, repayment date, original loan and whether any anti-avoidance provisions apply.
What If the Loan Is Repaid Within the Original 9 Months?
A different practical position applies where a qualifying repayment, release or write-off occurs before section 455 itself becomes payable.
HMRC states that section 458 relief is available immediately in this situation, so the company generally does not need to pay the section 455 amount and then wait to reclaim it.
CT600A reporting can still be required where the loan remained outstanding at the accounting period end.
Read the Director’s Loan 9 Month Rule →Can You Reclaim Part of the s455 Tax?
Yes. Section 458 relief is not limited to situations where the whole director’s loan has been repaid.
Where only part of the qualifying loan is repaid, released or written off, a proportionate amount of the original section 455 charge can potentially be relieved.
The remaining balance continues to require consideration until it is itself repaid, released or otherwise dealt with.
What Can Create Section 458 Relief?
Cash Repayment
The participator returns money to the company and reduces the outstanding loan.
Valid Dividend Credit
A properly declared dividend can potentially be credited against the director’s loan account.
Remuneration Credit
Salary or bonus may reduce the balance where correctly processed through payroll and credited.
Loan Release
The company may formally release the borrower from the debt, although separate personal tax consequences can arise.
Loan Write-Off
A qualifying write-off can produce company relief but can also create a tax charge on the borrower.
Partial Settlement
Relief may apply proportionately where only part of the debt is dealt with.
How Long Do You Have to Reclaim s455 Corporation Tax?
HMRC’s current guidance states that a section 458 claim must generally be made within four years from the end of the financial year in which the loan was repaid, released or written off.
This is important for older director’s loan accounts because a company can lose the ability to recover the tax if the claim is left beyond the statutory time limit.
From the end of the financial year in which the qualifying repayment, release or write-off occurred.
CT600A, Amended Return or L2P?
The appropriate claim route depends largely on when the repayment occurred and how long has passed since the accounting period in which the original loan arose.
Claim Through the Company Tax Return
Where appropriate, section 458 relief can be claimed through the CT600A supplementary pages.
Amend the Corporation Tax Return
Where the company remains within the relevant amendment period, an amended return may be used to reflect qualifying relief.
Loans to Participators Claim
HMRC provides the L2P process for reclaiming tax paid by close companies on loans that have subsequently been repaid, released or written off.
The Two-Year Point Affects How the Claim Is Made
CT600A / Return Amendment
HMRC says that where the reclaim is within two years of the end of the accounting period in which the loan was taken out, CT600A can generally be used with the relevant Company Tax Return or online amendment.
Use Form L2P
HMRC instructs companies to use L2P where the reclaim is two years or more after the end of the accounting period in which the original loan arose.
What Is an L2P Claim?
HMRC’s L2P service is specifically designed for close companies claiming relief on tax paid on loans to participators that have subsequently been repaid, released or written off.
A company or its authorised tax agent can make the claim.
The claim requires details of the company, the original loan, relevant Corporation Tax periods and the repayment or other event giving rise to relief.
HMRC distinguishes between recovery of the section 455 tax itself and interest charged because that tax was paid late.
Does HMRC Refund Interest Paid on the Original s455 Liability?
HMRC’s director’s loan guidance states that the company can reclaim qualifying section 455 Corporation Tax after permanent repayment, but it cannot reclaim interest charged on that Corporation Tax.
This makes early review particularly important where a large loan remains outstanding and the original company tax liability has not been paid by the statutory due date.
Check Whether the Repayment Was Followed by Further Borrowing
A repayment does not automatically produce section 458 relief if the director then takes another qualifying loan.
HMRC’s bed-and-breakfasting provisions can match a repayment against later borrowing, which can leave the original loan effectively outstanding for section 455 purposes.
The repayment history should therefore be reviewed before submitting an s455 reclaim.
Read the Director’s Loan Bed and Breakfasting Rules →HMRC introduced an online service in 2026 that it may ask companies, participators or authorised agents to use to confirm that loans reported on CT600A have been fully repaid.
HMRC May Ask for Confirmation That a Loan Was Fully Repaid
HMRC’s online service asks for the company name and UTR, details of loans originally reported on CT600A and a declaration concerning further participator loans around the relevant dates.
The service should not be used to change incorrect information on the original Company Tax Return. HMRC says the return should instead be amended where the underlying return information is wrong.
Relief Can Also Arise Without Cash Repayment
Section 458 relief can also arise where the company releases or writes off all or part of a qualifying loan.
However, this does not make a write-off tax-free. HMRC states that the amount released or written off can be treated as income of the participator, and National Insurance consequences can also arise in relevant circumstances.
A write-off should therefore be reviewed as a separate tax event, not simply as a way of recovering the company’s s455.
Information to Review Before Reclaiming s455 Corporation Tax
Mistakes When Trying to Recover s455
Related s455 & Director’s Loan Guides
An s455 Reclaim Depends on Accurate Historic Records
We may need to review the director’s loan ledger, previous annual accounts, Corporation Tax returns and repayments made after year end before establishing the correct claim.
s455 Relief & Reclaim Resources
Reclaim s455 Corporation Tax FAQs
Can I reclaim s455 Corporation Tax?
A company can generally claim section 458 relief where all or part of a qualifying loan to a participator is later repaid, released or written off.
How soon after repayment can s455 be reclaimed?
Where repayment occurs after the original section 455 payment point, relief is generally not due until 9 months and 1 day after the end of the Corporation Tax accounting period in which the repayment, release or write-off occurred.
What if the loan was repaid within the original 9 months?
HMRC states that relief is available immediately where the loan is repaid, released or written off before section 455 itself falls due, so the company will generally not need to pay the amount first.
Can I reclaim s455 after a partial repayment?
Yes. Proportionate relief can generally be available where only part of the qualifying loan has been repaid, released or written off.
What is the deadline for claiming s455 relief?
HMRC states that the claim must generally be made within four years from the end of the financial year in which the repayment, release or write-off occurred.
Do I use CT600A or L2P?
The correct route depends on timing. HMRC permits relevant claims through CT600A or an amended return in appropriate circumstances, while L2P is used for other claims including older repayments.
Can HMRC refund interest charged on s455?
HMRC states that although qualifying s455 Corporation Tax can be reclaimed, interest charged on that tax is not reclaimed in the same way.
What if the director repaid and then borrowed again?
HMRC’s bed-and-breakfasting provisions may restrict the relief. The repayment and later borrowing should be reviewed before a section 458 claim is submitted.
Can s455 be reclaimed if the loan is written off?
Section 458 relief can arise on a qualifying write-off or release, but separate Income Tax and potentially National Insurance consequences can arise for the borrower.
Does repaying the loan automatically trigger the HMRC refund?
No. HMRC requires a claim for section 458 relief. The company should determine when relief is due and use the appropriate claim procedure.
Check Whether Your Company Can Claim the Tax Back
Tell us the original loan period, s455 paid, repayment date, amount repaid and whether the director subsequently borrowed further money from the company.
Tell Us About the Original Loan and Repayment
The accounting periods and transaction dates are particularly important when determining when relief becomes available.
Reclaim s455 Corporation Tax After a Director’s Loan Is Repaid
You may be able to reclaim s455 Corporation Tax where a relevant director’s loan or other loan to a participator has subsequently been repaid, released or written off.
The repayment does not always produce an immediate tax refund. Section 458 relief has its own timing rules, claim deadlines and reporting procedures, and temporary repayments can be restricted by the director’s loan bed-and-breakfasting rules.
When Can a Company Reclaim s455 Corporation Tax?
Where a company has suffered a section 455 charge on a relevant loan to a participator, relief can generally become available when all or part of that loan is subsequently repaid, released or written off.
The relief is provided under section 458 of the Corporation Tax Act 2010. A partial repayment can therefore produce proportionate relief rather than requiring the whole loan to be cleared first.
Reclaiming s455 Corporation Tax is separate from dealing with the director’s personal tax position and any beneficial-loan consequences.
Where relief follows a repayment made after the original s455 charge arose, the company cannot necessarily receive the refund immediately.
Repaying the Loan Does Not Always Mean an Immediate Refund
HMRC states that where a loan is repaid, released or written off after the original section 455 payment point, the relief is generally not due until 9 months and 1 day after the end of the Corporation Tax accounting period in which that repayment, release or write-off occurred.
This means there can be a substantial delay between the date the director repays the company and the date HMRC can actually repay the section 455 tax.
Why the s455 Refund Can Be Delayed
This illustrates the timing rule only. The actual position depends on the company’s accounting periods, repayment date, original loan and whether any anti-avoidance provisions apply.
What If the Loan Is Repaid Within the Original 9 Months?
A different practical position applies where a qualifying repayment, release or write-off occurs before section 455 itself becomes payable.
HMRC states that section 458 relief is available immediately in this situation, so the company generally does not need to pay the section 455 amount and then wait to reclaim it.
CT600A reporting can still be required where the loan remained outstanding at the accounting period end.
Read the Director’s Loan 9 Month Rule →Can You Reclaim Part of the s455 Tax?
Yes. Section 458 relief is not limited to situations where the whole director’s loan has been repaid.
Where only part of the qualifying loan is repaid, released or written off, a proportionate amount of the original section 455 charge can potentially be relieved.
The remaining balance continues to require consideration until it is itself repaid, released or otherwise dealt with.
What Can Create Section 458 Relief?
Cash Repayment
The participator returns money to the company and reduces the outstanding loan.
Valid Dividend Credit
A properly declared dividend can potentially be credited against the director’s loan account.
Remuneration Credit
Salary or bonus may reduce the balance where correctly processed through payroll and credited.
Loan Release
The company may formally release the borrower from the debt, although separate personal tax consequences can arise.
Loan Write-Off
A qualifying write-off can produce company relief but can also create a tax charge on the borrower.
Partial Settlement
Relief may apply proportionately where only part of the debt is dealt with.
How Long Do You Have to Reclaim s455 Corporation Tax?
HMRC’s current guidance states that a section 458 claim must generally be made within four years from the end of the financial year in which the loan was repaid, released or written off.
This is important for older director’s loan accounts because a company can lose the ability to recover the tax if the claim is left beyond the statutory time limit.
From the end of the financial year in which the qualifying repayment, release or write-off occurred.
CT600A, Amended Return or L2P?
The appropriate claim route depends largely on when the repayment occurred and how long has passed since the accounting period in which the original loan arose.
Claim Through the Company Tax Return
Where appropriate, section 458 relief can be claimed through the CT600A supplementary pages.
Amend the Corporation Tax Return
Where the company remains within the relevant amendment period, an amended return may be used to reflect qualifying relief.
Loans to Participators Claim
HMRC provides the L2P process for reclaiming tax paid by close companies on loans that have subsequently been repaid, released or written off.
The Two-Year Point Affects How the Claim Is Made
CT600A / Return Amendment
HMRC says that where the reclaim is within two years of the end of the accounting period in which the loan was taken out, CT600A can generally be used with the relevant Company Tax Return or online amendment.
Use Form L2P
HMRC instructs companies to use L2P where the reclaim is two years or more after the end of the accounting period in which the original loan arose.
What Is an L2P Claim?
HMRC’s L2P service is specifically designed for close companies claiming relief on tax paid on loans to participators that have subsequently been repaid, released or written off.
A company or its authorised tax agent can make the claim.
The claim requires details of the company, the original loan, relevant Corporation Tax periods and the repayment or other event giving rise to relief.
HMRC distinguishes between recovery of the section 455 tax itself and interest charged because that tax was paid late.
Does HMRC Refund Interest Paid on the Original s455 Liability?
HMRC’s director’s loan guidance states that the company can reclaim qualifying section 455 Corporation Tax after permanent repayment, but it cannot reclaim interest charged on that Corporation Tax.
This makes early review particularly important where a large loan remains outstanding and the original company tax liability has not been paid by the statutory due date.
Check Whether the Repayment Was Followed by Further Borrowing
A repayment does not automatically produce section 458 relief if the director then takes another qualifying loan.
HMRC’s bed-and-breakfasting provisions can match a repayment against later borrowing, which can leave the original loan effectively outstanding for section 455 purposes.
The repayment history should therefore be reviewed before submitting an s455 reclaim.
Read the Director’s Loan Bed and Breakfasting Rules →HMRC introduced an online service in 2026 that it may ask companies, participators or authorised agents to use to confirm that loans reported on CT600A have been fully repaid.
HMRC May Ask for Confirmation That a Loan Was Fully Repaid
HMRC’s online service asks for the company name and UTR, details of loans originally reported on CT600A and a declaration concerning further participator loans around the relevant dates.
The service should not be used to change incorrect information on the original Company Tax Return. HMRC says the return should instead be amended where the underlying return information is wrong.
Relief Can Also Arise Without Cash Repayment
Section 458 relief can also arise where the company releases or writes off all or part of a qualifying loan.
However, this does not make a write-off tax-free. HMRC states that the amount released or written off can be treated as income of the participator, and National Insurance consequences can also arise in relevant circumstances.
A write-off should therefore be reviewed as a separate tax event, not simply as a way of recovering the company’s s455.
Information to Review Before Reclaiming s455 Corporation Tax
Mistakes When Trying to Recover s455
Related s455 & Director’s Loan Guides
An s455 Reclaim Depends on Accurate Historic Records
We may need to review the director’s loan ledger, previous annual accounts, Corporation Tax returns and repayments made after year end before establishing the correct claim.
s455 Relief & Reclaim Resources
Reclaim s455 Corporation Tax FAQs
Can I reclaim s455 Corporation Tax?
A company can generally claim section 458 relief where all or part of a qualifying loan to a participator is later repaid, released or written off.
How soon after repayment can s455 be reclaimed?
Where repayment occurs after the original section 455 payment point, relief is generally not due until 9 months and 1 day after the end of the Corporation Tax accounting period in which the repayment, release or write-off occurred.
What if the loan was repaid within the original 9 months?
HMRC states that relief is available immediately where the loan is repaid, released or written off before section 455 itself falls due, so the company will generally not need to pay the amount first.
Can I reclaim s455 after a partial repayment?
Yes. Proportionate relief can generally be available where only part of the qualifying loan has been repaid, released or written off.
What is the deadline for claiming s455 relief?
HMRC states that the claim must generally be made within four years from the end of the financial year in which the repayment, release or write-off occurred.
Do I use CT600A or L2P?
The correct route depends on timing. HMRC permits relevant claims through CT600A or an amended return in appropriate circumstances, while L2P is used for other claims including older repayments.
Can HMRC refund interest charged on s455?
HMRC states that although qualifying s455 Corporation Tax can be reclaimed, interest charged on that tax is not reclaimed in the same way.
What if the director repaid and then borrowed again?
HMRC’s bed-and-breakfasting provisions may restrict the relief. The repayment and later borrowing should be reviewed before a section 458 claim is submitted.
Can s455 be reclaimed if the loan is written off?
Section 458 relief can arise on a qualifying write-off or release, but separate Income Tax and potentially National Insurance consequences can arise for the borrower.
Does repaying the loan automatically trigger the HMRC refund?
No. HMRC requires a claim for section 458 relief. The company should determine when relief is due and use the appropriate claim procedure.
Check Whether Your Company Can Claim the Tax Back
Tell us the original loan period, s455 paid, repayment date, amount repaid and whether the director subsequently borrowed further money from the company.
Tell Us About the Original Loan and Repayment
The accounting periods and transaction dates are particularly important when determining when relief becomes available.