Decisions / What If The Company Owes The Director?
What If The Company Owes The Director?
A directors’ loan account in credit means the company owes the director. That can start from an opening balance, or from personal cash used on a Ltd purchase. Repayments are modelled as a return of capital, distinct from salary and from dividends taxed at the 2026/27 rates. The opposite case — an overdrawn loan and s455 — is not in the engine. The full write-up is Directors' Loan Account.
A journey can hold this event and later ones. Two free journeys, 15-year cap. Paid paths run 30 years.
Then The Events That Follow
This question starts the journey. Add later events on the same years so tax, leftover cash, childcare and retirement move together. A calculator answers one slice. Free paths run 15 years; paid unlocks run 30.
How Kumberi Models Directors' Loan Credit
Credit Only, On Purpose
You can enter an opening directors’ loan credit on the Ltd source. Personal funds used on a Ltd property or car purchase can increase that credit. Repayments each year follow the drawdown you set, capped by remaining credit and company cash. Path A (opening balance) and Path B (purchase injections) are described in Directors' Loan Account.
Not A Dividend And Not s455
DLA repayments are not modelled as taxable dividend or salary in the year loop. Salary and dividends remain separate extraction lines — compare them on salary versus dividend or the calculator. Overdrawn DLA (the director owes the company) and section 455 tax are out of scope.
Retirement Can Draw Remaining Credit
Remaining credit can follow a retirement DLA policy you set (leave in the company, draw down, a fixed annual amount, or a lump sum into savings). That is a modelling switch, not a recommendation of how to extract. How retirement pots sit beside this is in Retirement Planning.
Salary Versus Dividend Does Not Replace DLA
The salary-versus-dividend calculator is for extraction mix in a year. Directors’ loan credit is a balance-sheet story that needs the journey: opening credit, injections from purchases, company cash caps, and optional retirement drawdown. Read Directors' Loan Account before assuming s455 is in the product — it is not.
Read The DLA GuideWhat This Page Does Not Model
- Overdrawn directors’ loans and s455 tax are not modelled — Directors' Loan Account states that limit plainly.
- VAT is not a VAT return. IR35 status is user-declared on the Ltd, not determined by the engine. Each Ltd has its own cash pot; there are no inter-company loans.
- Kumberi does not prepare company accounts or CT600 figures.
Common Questions
Does Kumberi Model s455 Tax On An Overdrawn Loan?
No. The engine models directors’ loan credit only — when the company owes the director. Overdrawn balances and s455 are out of scope. HMRC’s directors’ loan pages are the official reference for the tax that is not in this product. See Directors' Loan Account.
If I Buy A Company Property With Personal Cash, What Happens?
Where that purchase is set up as a Ltd asset funded from personal funds, the model can increase directors’ loan credit. Company cash does not keep that cash; it funded the asset. Remaining credit is a receivable in household net worth, with rules to avoid double-counting Ltd property equity.
Are DLA Repayments Taxed As Dividends In The Model?
No. Repayments of credit are modelled as a return of capital, not as dividend income. Salary and dividends remain separate extraction lines.
How The Rules Are Documented
These are the Learn pages behind this decision — inspectable methodology, not extra opinion pieces. The full set lives on Learn.
- Directors' Loan AccountCredit balances, purchase injections, repayments, and what is out of scope (s455).
- Calculation MethodologyHow company and director tax sit in the same year loop.
- Retirement PlanningRemaining credit can follow a retirement DLA policy you set.
Other Decisions
- Salary Or Dividend For A Ltd Company?Corporation tax, NI and the April 2026 dividend-rate rise on one timeline — not a slogan about the optimal mix.
- Could We Afford This House?Stamp duty, the deposit and the new mortgage — on the same years as tax and retirement.
- What Does A Company Car Cost In Tax?BiK on P11D list price — 4% for a zero-emission car in 2026/27 — next to salary and company cash.
Model The Chain On A Timeline
This event, then the ones after it. Two free journeys, 15-year cap. Paid paths run 30 years.
Kumberi is educational modelling, not a financial adviser. Figures are illustrations under stated UK tax and pension assumptions. Nothing on these pages is a recommendation to buy, sell, borrow, extract or retire.