Director Expense Claims: How to Reimburse Yourself

If you pay for a business cost with your own money, your limited company can repay you through a director expense claim, and that repayment is normally tax-free. The key is that the cost is genuinely for the business and backed by a receipt. This guide explains how director expense claims work, what you can and cannot reclaim, and how to record them so your accounts stay clean.

Key takeaways

• Repaying genuine business costs you paid personally is normally tax-free.
• Every claim needs evidence: a receipt, invoice or mileage log.
• Mileage in your own car can be repaid tax-free up to HMRC's approved rates.
• Unpaid claims are credited to your director's loan account.
• Personal costs are never business expenses, whoever pays the bill.

What is a director expense claim?

A director expense claim is a record that you, as a director, paid for something on behalf of your company and want to be repaid. It usually lists the date, supplier, description, amount and business reason, with the receipt attached. Once approved, the company pays you back, either by bank transfer or by crediting your director's loan account.

A director is legally an employee of the company, so the employee expense rules apply. Since April 2016, reimbursed expenses that would be deductible for the employee are covered by an exemption, which means they do not need to be reported as benefits. GOV.UK explains the reporting rules in its guide to expenses and benefits for employers.

What can you claim back?

The general test is whether the cost was incurred wholly, exclusively and necessarily in doing your job as a director. Typical examples include:

• business travel such as train fares, parking and tolls on business journeys
• hotels and meals when travelling away on business
• software subscriptions and equipment bought for the company
• stationery, postage and small office supplies
• professional subscriptions relevant to the business

Our guide to corporation tax allowable expenses covers what the company itself can deduct. Some costs, such as client entertaining, can be repaid to you but are not deductible for corporation tax.

Mileage in your own car

If you use your own car for business journeys, the company can pay you a mileage allowance instead of reimbursing fuel receipts. Payments up to the approved mileage allowance are tax-free. GOV.UK's business travel mileage rules list 55p per mile for cars and vans for the first 10,000 business miles from 6 April 2026 (45p before that date), and 25p per mile above 10,000. Check the current figure on GOV.UK before each claim. Ordinary commuting to a permanent workplace is not business mileage. Keep a log as described in our mileage log guide.

Reimbursement options compared

Step-by-step: making a director expense claim

1. Keep the receipt. Photograph it or save the email invoice on the day.
2. Note the business reason. One line is enough, for example "train to client site, Leeds".
3. Group claims monthly. Add them to a simple expense claim form or your bookkeeping software's expense tool.
4. Record it in the books. Post each cost to the right expense category with the amount owed to you.
5. Repay or credit. Transfer the total from the business account with a clear reference, or credit your loan account.
6. Reconcile. Make sure the payment matches the claim when you reconcile the bank.

Worked example (illustrative example)

Illustrative example only, not a real business. Priya runs a one-person consultancy company. In October she pays personally for a £96 train ticket to a client meeting, a £24 software subscription for the company and a £35 dinner with a client. She also drives 300 business miles in her own car.

Her expense claim totals £155 of receipts plus mileage. At 55p per mile, the 300 miles come to £165, all within the first 10,000 business miles of the tax year. The company repays her £320 by bank transfer, tax-free. In the accounts, the train fare, software and mileage are allowable for corporation tax. The client dinner is repaid to Priya but is not deductible, because business entertaining is disallowed. If the company had been short of cash, the £320 would have been credited to her director's loan account instead.

Common mistakes

• Claiming personal costs. Groceries, family holidays and ordinary commuting are personal, even if paid from the business account.
• Paying round sums without receipts. A flat "expenses" payment with no evidence can be treated as taxable pay.
• Claiming fuel and mileage for the same journey. Mileage allowance covers running costs, so you cannot also claim the fuel.
• Forgetting old claims. Unclaimed expenses mean you have paid business costs out of taxed income.
• Not reconciling the loan account. An unclear balance makes it hard to show whether the company owes you or you owe the company.

How we can help

Our limited company packages start from £75 per month on a fixed fee and include bookkeeping support, so expense claims and your director's loan account are recorded properly through the year. See our limited company packages, compare our pricing, or contact us to set up a simple expense process.