In that case, when you click the green “tagged” button the popup should start with “This Payment was made by ‘name of customer’ …” - the word “Payment” is a link, click on that to go through to the payment record and it should now say that £210 is allocated to an invoice and £500 remains unallocated. There will be a button “refund balance” at the top, click that and you should have the option to refund it from the relevant director’s loan account.
This will effectively split the £710 into £210 allocated to the customer invoice and £500 transferred from the director’s loan account (i.e. the company owes £500 to the director). If/when you then actually pay that £500 over to the director you’d tag that transaction as a transfer between accounts, to return the DL account balance to zero (or whatever it was before)