Student or Postgraduate Loan Repayments

18/05/2024 - 7 minutes read

Student or postgraduate loan repayments are calculated as 9% of your total Self Assessment (SA) income above the threshold of your repayment plan type. For student loans and postgraduate loan deduction are calculated based on 6% of your total SA income above the threshold.

Total income for SA includes:

  • – any PAYE (Pay As You Earn) employment income you had in the relevant tax year — your income for all employments will be combined, even if they were under the threshold through PAYE
  • – other income to declare, such as:

If you were employed in the relevant tax year, and your pay was over the threshold for your loan or plan type, then your employer would have taken student and postgraduate loan repayments from your salary through PAYE. HMRC will deduct these repayments from the amount you have to repay through SA.

If you are repaying Plan 1, 2 or 4 student loan and postgraduate loan at the same time, you’ll be due to repay 15% of your total income above the threshold.

Student or Postgraduate Loan Repayments

Student or Postgraduate Loan Repayments

Information on your loan or plan type is supplied to HMRC by the SLC.

The SLC will also tell HMRC if you have:

  • – repaid your loan in full
  • – been charged more than you owe

HMRC will take action to reduce or remove your Self Assessment student or postgraduate loan repayments so you do not pay back too much.

Information you’ll need for student or postgraduate loan repayments

You’ll need details of any:

Off-payroll working and Student or postgraduate loan repayments

If you are subject to the off-payroll working rules for any period during the tax year, your student and postgraduate loan deductions for that period will be calculated through your Self Assessment tax return.

How to fill in your online tax return to include Student or postgraduate loan repayments

Section 2 — ‘Tell us about you’

Select ‘Yes’.

If the SLC have told you that your repayments started on or before the 6 April of the year you’re completing your return for, even if an employer made repayment deductions or your income was below the relevant threshold, you need to choose either:

  • – the student loan plan type you’re repaying
  • – postgraduate loan
  • – the student loan plan type and postgraduate loan, if you are paying both loans back at the same time

These boxes may already be completed for you.

HMRC systems will then use the information supplied by the SLC to work out the correct repayment amounts due for:

  • – student loan
  • – postgraduate loan
  • – student or postgraduate loan repayments, if you are paying both loans back at the same time

If you change the boxes:

  • – a warning message will be issued advising that the entry is different from the plan type or loan provided by the SLC — the warning message will advise you to check the letter from the SLC for the correct loan or plan type
  • – an automatic calculation will be issued advising HMRC has changed the loan, plan type and the affect this has had on the calculation

Recording incorrect loan types will affect the student loan and postgraduate loan amount charged. HMRC systems will verify the information supplied by the SLC and a calculation will be automatically issued to advise of any changes.

These are the only questions you have to answer if you’re repaying your student loan or postgraduate loan, or both, and do not have any PAYE income.

Section 4 — ‘Fill in your return’

Put the total of the amounts already deducted through your employment for the tax year you’re completing your return for. You can find these amounts on your P60 or by adding up all the deductions for the student loan, postgraduate loan, or for both, on your payslips for that year.

You need to record the student loan plan type deductions and postgraduate loan deductions separately in the relevant boxes.

Do not include any overseas direct debit payments or voluntary payments you have made in this section.

The repayment amount deducted by your employer may already show here. You need to check the amount is correct even if it’s zero.

If it’s correct, choose ‘Yes’ then click ‘Save and continue’.

If it’s not correct, choose ‘No’ and enter the correct amount. Remember to tell Hmrc why the figure is different and include the name and date of the document that shows this.

Hmrc will check the amount given against the information provided by your employer.

Recording incorrect deductions will affect the student or postgraduate loan repayments, and could result in you being charged more.

How can MCL Accountants help with your queries on student or postgraduate loan repayments?

Contact MCL Accountants on 01702 593 029 if you would like us to answer your queries on student or postgraduate loan repayments or if you need any assistance with the preparation and submission of your business accounts or self-assessment tax returns to HMRC.