Can a company with a director's loan file dormant accounts?
By DormantFile · Updated 1 June 2026
Director's loans are one of the most common reasons a company that feels dormant actually isn't. Whether a director's loan breaks dormant status depends on whether money has actually moved, not on the balance sitting on the books.
The test that matters
A company is dormant only if it has had no significant accounting transactions during the period. A director's loan account (DLA) records money lent between the director and the company. The question is whether anything went through it this year:
- No movement at all. The loan balance is unchanged from last year-end — no new lending, no repayments, no interest charged. There's no transaction in the period, so the company can stay dormant and file dormant accounts.
- Money moved. The director lent the company money, the company repaid some, or interest was charged or paid through the company's own bank account. Each of those is a significant accounting transaction, so the company is not dormant for that period.
The classic trap is paying a company bill "to keep things ticking over." If the company reimburses you, or pays the confirmation statement fee from its own account, that movement runs through the books and breaks dormancy — even though nobody would call the company active. Paying those costs personally, with the company account untouched, keeps it dormant.
What you file if the loan breaks dormancy
If money moved and the company is no longer dormant, you don't necessarily need an accountant. A company that isn't trading but has a transaction or two — a director's loan movement, a loan being repaid — files FRS 105 micro-entity accounts instead of dormant ones: a short balance sheet showing the loan, with the CT600 still nil if the only activity was the loan (lending or repaying money creates no taxable profit).
This is the same situation as a company repaying a Bounce Back Loan from its own account, and DormantFile handles it the same way — you choose micro-entity at filing time and enter the loan figures.
When you do need an accountant
Director's loans get more complicated when there's a tax angle:
- An overdrawn DLA (the company has lent the director money) that's still outstanding nine months and one day after the year end can trigger a section 455 tax charge on the company. That's a real tax liability and a CT600 that isn't nil — speak to an accountant.
- Interest charged on the loan, beneficial-loan benefit-in-kind issues, or write-offs all have tax consequences worth getting advice on.
If the loan is simply dormant (no movement) or the company is just repaying it with no tax charge arising, you're in self-serve territory.
Key points
- A director's loan only breaks dormancy if money actually moves through the books in the period.
- A static DLA balance with no movement keeps the company dormant.
- New lending, repayments, or interest through the company account make it non-trading but not dormant — file micro-entity accounts, not dormant ones.
- An overdrawn DLA can trigger a section 455 charge and a non-nil CT600 — that's an accountant's job.
- Repaying a loan with no tax charge is something DormantFile can file for you.