Written off or released director’s loans

HMRC are writing to customers who, between April 2019 and April 2023:

• have received a director’s loan that has been written off or released

• may not have declared the amount as income on their Self-Assessment tax return

The loan amount is liable to Income Tax under S415 ITTOIA05 (Income Tax Trading and Other Income).

Actions to take

Make a disclosure for your client using the digital disclosure service (DDS) Tell HMRC about underpaid tax from previous years.

For loans since 6 April 2023, tax returns will be within the amendment deadline window which means you can make changes in tax returns by following the instructions online.

For further guidance and advise contact best Accountants Manchester Amin & Co Accountants or call at 0161 224 3510