The short answer is yes you can. The interest charge in the company accounts will be an allowable expense for Corporation Tax purposes. However this does mean that the interest received by you will be subject to income tax.
When companies pay interest to an individual they must deduct basic rate tax at 20% in the same way that a bank deducts tax on the interest it pays to savers. The company must also complete form CT61 every quarter to record the interest paid and tax deducted. This form must be submitted to HM Revenue & Customs along with payment of the tax deducted. For example, if a company makes an interest payment of £100 then the director will physically receive £80 and the company will pay the remaining £20 to HM Revenue & Customs. If you are a lower rate tax payer then there will be no further tax on this interest, however there will be additional tax to pay when you complete your tax return if your income is in the higher brackets.
If you would like to find out more about paying interest to directors then please contact your local TaxAssist Accountant.