How to Reclaim S455 Tax: Nine-Month Wait, Deadline, and Interest

To reclaim S455 tax, the company waits until the director’s loan has been repaid, released, or written off, sits out the mandatory nine months and one day from the end of the accounting period in which that happened, and then submits a claim through HMRC’s online L2P service (or, in the right circumstances, on the CT600A pages of the Corporation Tax return). The right to recover the tax expires four years after the end of the financial year in which the loan was cleared, so timing matters.

What Triggers the Refund

Three events unlock a claim. Straight repayment is the usual one: the director puts money back into the company’s account and the loan balance drops. A formal release, generally by deed, works too, as does a write-off in the company’s books.¹

One boundary to keep in mind. A release or write-off clears the debt for s455 purposes, but it creates a personal income tax charge for the director on the forgiven amount, taxed at dividend rates under ITTOIA 2005.² That is a separate liability on the director; it does not reduce what the company can reclaim.

Partial Repayments Count

You do not need to clear the whole loan before starting to recover the tax. Section 458 gives relief for “a proportionate part” when part of the loan is repaid or written off.¹ If the original loan was £100,000 and the company paid £33,750 in s455, repaying £40,000 entitles the company to reclaim £13,500, being 33.75% of the amount repaid. Each partial repayment generates its own refund entitlement, and each one runs on its own waiting-period and deadline clock.

The Bed and Breakfasting Traps

HMRC blocks the obvious workaround of repaying a loan just long enough to escape s455 and then borrowing the money back. Two rules apply, and either one will void a repayment.

The 30-day rule catches short round-trips. If the original loan was £5,000 or more and the director takes a new loan of £5,000 or more within 30 days before or after the repayment, HMRC disregards the repayment and treats the s455 charge as still in place.³

The intentions rule catches the planned version. If the original loan exceeded £15,000 and there was an arrangement in place at the time of repayment to borrow again, the repayment is disregarded no matter how long the gap.³ A director who repays £50,000 in March and draws £50,000 again in April has achieved nothing for s455. The reclaim only becomes available once a genuine, permanent repayment happens.

The Nine-Month Wait

Even after a valid repayment, you cannot file straight away. Section 458(5) blocks relief until nine months from the end of the accounting period in which the repayment, release, or write-off took place.¹ HMRC applies this as nine months and one day in practice. If the accounting period ends on 31 December 2025 and the loan was cleared during that period, the earliest filing date is 1 October 2026.⁴ File earlier and the claim will be rejected.

There is one shortcut. If the loan is repaid within nine months and one day of the end of the accounting period in which it was made, the company can claim the relief inside that period’s Corporation Tax return on supplementary page CT600A. Parts 2 and 3 handle the calculation, and the s455 charge and the relief effectively net off in the same return.⁵ For anything repaid after that window, you file a standalone L2P claim later.

The Four-Year Deadline

The company has four years from the end of the financial year in which the repayment, release, or write-off happened to submit the claim. Miss it and the right is lost for good.¹ The clock runs from the end of the financial year (1 April to 31 March for Corporation Tax purposes), not from the repayment date. A loan repaid on 15 June 2025 falls within the year ending 31 March 2026, giving a claim deadline of 31 March 2030.

Companies that repay a loan in instalments over several years end up with separate four-year windows for each tranche. It is easy to keep an eye on the recent ones and let an older window quietly expire. HMRC will not remind you.

Filing the Claim

Standalone claims go through HMRC’s online L2P (Loans to Participators) service. Access is via the Government Gateway; if you do not have a user ID, you can set one up during the process.⁴

Where an accountant files for you, they need an agent services account and must sign in with the Government Gateway credentials tied to that account, not their HMRC Online Services for Agents login. Using the wrong credentials is a common cause of access problems.⁴

What to Have Ready

Pull the following together before you start:

The company’s Unique Taxpayer Reference (UTR).
Company bank or building society details for the refund.
Accounting period start and end dates for the period in which the original loan was made.
The date the loan was made.
Accounting period start and end dates for the period in which the repayment, release, or write-off occurred.
The date of the repayment, release, or write-off.
The value repaid, released, or written off.
The date relief is due: nine months and one day after the end of the accounting period in which the repayment took place.

These details must line up with the company’s Corporation Tax records. If HMRC cannot cross-reference the original s455 payment, the claim gets flagged for manual review and slows down. Take the accounting period dates from the filed CT600s rather than reconstructing them from memory.⁴

After You File

HMRC generally pays the refund by direct transfer to the account details supplied with the claim. If you leave the bank details out, HMRC investigates further before issuing a cheque, which adds time. In some cases HMRC applies the refund as a credit against existing Corporation Tax rather than as cash, in which case the statement of account will show the reduced balance.

Keep the supporting evidence on file even though you do not send it with the claim: bank statements showing the repayment, board minutes approving any write-off or release, and any deed of waiver. HMRC may ask for them if the claim is queried.

Interest on the Refund

HMRC pays repayment interest on s455 refunds. The current rate is 2.75%, effective from 9 January 2026, calculated as the Bank of England base rate minus 1% with a floor of 0.5%.⁶ The amounts are modest, but on a large loan that took years to clear the interest is worth checking against the refund figure when it arrives.

Which Rate Applies to Your Refund

The s455 rate is currently 33.75%, matching the upper dividend tax rate.⁷ For loans made before 6 April 2022 the rate was 32.5%, and the refund is calculated at the rate that was originally charged.[mfm][/mfm]³ Because the s455 rate tracks the dividend upper rate, it can shift when dividend rates are changed, so confirm the rate in force when the original s455 was paid before checking the reclaim figure.

1
Legislation.gov.uk. Corporation Tax Act 2010 – Section 458
2
Legislation.gov.uk. Income Tax (Trading and Other Income) Act 2005 – Section 415
3
GOV.UK. Director’s Loans – If You Owe Your Company Money
4
GOV.UK. Reclaim Tax Paid by Close Companies on Loans to Participators (L2P)
5
GOV.UK. Completing the CT600A Page for Close Company Loans
6
GOV.UK. HMRC Interest Rates for Late and Early Payments
7
Legislation.gov.uk. Corporation Tax Act 2010 – Section 455