Report directors' loan accounts — insolvency practitioner bulletin 5 (2024)
Published 31 January 2025
© Crown copyright 2025
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/insolvency-practitioner-bulletin-5-2024-report-directors-loan-accounts/b4d9dc4a-6803-43c7-b0b0-620eb21120f5
Background
On 22 September 2022, HMRC initiated a new voluntary process for insolvency practitioners to help HMRC to manage the tax impacts of directors’ loan accounts.
The process was published by the insolvency regulators and is also set out at Dear IP chapter 8.46 found on the R3 website.
Under the process, insolvency practitioners were invited to send copies of their final reports in corporate insolvency cases to a new mailbox.
HMRC would use the reports to identify tax compliance risks which may, among other potential compliance responses, lead to a letter from HMRC to any director with an unpaid loan account.
These letters prompted the directors to comply with their personal tax obligations in relation to that loan.
During the 18 months the new process has been in place many insolvency practitioners have engaged with HMRC.
We are grateful for the support for HMRC’s compliance work which has been shown by insolvency practitioners engaging with the mailbox.
We consider the new process has helped foster greater understanding of directors’ loan accounts among insolvency professionals and has led to more efficient processing of section 458 Corporation Tax 2010 repayments, in addition to supporting HMRC’s compliance work.
Way forward
In view of the insight which insolvency practitioners’ voluntary engagement through use of the mailbox has given us, and the working practices which have evolved, it is clear there is no longer a need for a dedicated mailbox.
Rather, where insolvency practitioners wish to engage with HMRC regarding directors’ loan accounts they should write to:
Corporation Tax Services
HM Revenue and Customs
BX9 1AX
United Kingdom
If they:
- are appointed in a corporate insolvency and wish to reclaim tax under section 458 Corporation Tax Act 2010, in respect of previous section 455 tax paid by the company
- are seeking a repayment under section 458 where the section 455 tax was paid to HMRC as part of a contract settlement
- have general queries about the operation of corporation tax in relation to an insolvent company
Therefore, from 1 April 2024 the mailbox was decommissioned.
Any referrals to the mailbox received prior to this date will be handled business as usual.
Further questions
If you have any questions about this insolvency bulletin, please direct them to R3 or your representative group who will take them forward with HMRC.