A new loans to participators tool has been published that allows companies, participators and their agents to confirm to HMRC that a participator has fully repaid a loan declared on a company's tax return. HMRC have also advised that the Corporation Tax online service will not be updated to reflect the increased s.455 tax rates until 6 April 2027.
Loans to participators
Where a Close company makes a Loan to a participator (or an associate of a participator) in an accounting period that is not repaid in that period, a tax charge can arise under s.455 CTA 2010.
- Where all or part of such a loan to a participator is repaid, released, or written off within nine months of the end of the accounting period, relief from the s.455 tax charge can be claimed in the Corporation Tax return supplementary page CT600A.
For Corporation Tax returns submitted before 1 April 2025, it was possible to claim relief in the CT600A for an anticipated future loan repayment (i.e, a repayment expected to be made before the nine-month deadline but after the date the Corporation Tax return was filed with HMRC).
- This position changed from 1 April 2025; it is no longer possible to file a Corporation Tax return with a future repayment date for a loan to a participator.
In November 2025, HMRC Commenced a campaign addressing their concern of a risk of tax loss where the anticipated loan repayment was not made in the amount or on the date expected, and the company had not amended its Corporation Tax return to reflect this.
Participator loans repaid: HMRC's new tool
HMRC may ask a company to confirm that participators have fully repaid any loans declared on its tax return by the dates shown on the return. In April 2026, an online tool was launched to facilitate this.
The tool can be used by a company's:
- Officers (e.g. a director or company secretary).
- Participators (e.g. a shareholder).
- Tax agent.
To use the tool, the following information will be required:
- The company's Unique Taxpayer Reference (UTR).
- Details of any loans to participators included in the return (on page CT600A).
- The name and role of the individual using the tool.
The individual using the tool will need to confirm that the company did not make any other loans to participators in the:
- 30 days before the end of the accounting period.
- 30 days after the official filing date.
The tool should not be used if a company's tax return requires amendment.
Increase in s.455 tax rate from 6 April 2026
The rate of s.455 tax increased from 33.75% to 35.75% for loans made, or benefits conferred, on or after 6 April 2026.
- HMRC have confirmed that the Corporation Tax online service will be updated to reflect this change on 6 April 2027.
This means that if the new 35.75% rate applies to a company and it files its Corporation Tax return before 6 April 2027, it will need to amend the return after 6 April 2027 to reflect the new rate.
Useful guides on this topic
Directors' loan accounts: Toolkit (subscribers)
What is the tax treatment for an overdrawn director's loan account? What are the consequences of an outstanding loan to a participator?
Loans to participators (Close Company Loans toolkit)
What is the Corporation Tax treatment when a close company makes a loan to a participator (director-shareholder)? How do the 'bed and breakfasting' rules work? What are the concerns with indirect loans, upstream loans and MBOs?
Close companies, definitions & control
What is a Close company? What are the tax consequences? What is a Participator? What is meant by control of a company? What are the tests for Control?
How to reclaim s.455 tax paid on loans to participators
How do I reclaim s.455 tax on loans to participators? Which form do I use? Where can I find the link?
Consultation on reporting company payments to participators
HMRC have launched a consultation, 'Reporting company payments to participators - modernising the reporting framework'. It proposes new rules that would make the reporting of transactions between close companies and their participators mandatory.
External links
HMRC: Tell HMRC about loans that participators have repaid in full
HMRC: Changes and issues affecting the Corporation Tax online service