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HMRC internal manual

National Insurance Manual

NIM12017 - Class 1: Calculating Class 1 NICs for Directors: Withdrawals from Directors’ loan accounts

Regulation 22 SSCR 2001

Each withdrawal or debit transaction can be:

  • a repayment, or partial repayment, of the loan if the account is in credit, or
  • a further loan, or
  • a payment made on account of earnings.

An overdrawn account might be initial evidence that withdrawals are on account ofremuneration to be credited at the end of the company’s accounts year but it is notconclusive in itself. An account might be overdrawn during the company’s accountsyear because

  • the company has agreed to make a loan or loans to the director, or
  • in the expectation that it will return to a credit balance, because either



  • the director’s remuneration will be credited at a later date, or
  • company dividends or some other sum will be credited at a later date.