NIM12017 | Class 1: Calculating Class 1 NICs for Directors: Withdrawals from Directors' loan accounts

Regulation 22 Social Security (Contributions) Regulations 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 of remuneration to be credited at the end of the company’s accounts year but it is not conclusive in itself. An account might be overdrawn during the company’s accounts year 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.