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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Self Assessment: student loan repayments

Not everyone has to fill in a self assessment tax return each year. Common examples of when you are likely to need to fill in one are: if you are self-employed, pay higher rates of tax, or have some other source of income which is not taxed before you receive it – for example, you rent out a property.

This page explains how repayments work under the self assessment tax system if you are on a Plan 1, Plan 2 or Plan 4 income-contingent (income-based) loans. If you have a postgraduate loan, see our separate page.

If you have gone to work abroad and are not in the UK tax system, you will need to make a payment arrangement direct with the Student Loans Company (SLC).

Content on this page:

Self assessment tax returns and student loans

Having a student loan is not in itself a reason for needing to complete a self assessment tax return. You usually only have to complete one if it is needed for your taxes and HM Revenue & Customs (HMRC) ask you to do so (or you notify them that you have a tax reason for needing one).

If you are required to complete a tax return, the form and the calculation also take into account your student loan repayments.

Calculation of Plan 1, Plan 2 and Plan 4 loans under self assessment

We explain the different repayment thresholds for Plan 1, Plan 2 and Plan 4 loans on our page on student loan repayments. The examples below illustrate how the calculations work under the different loan plans.

Plan 1 repayment calculation under self assessment

Caitlin has a Plan 1 income-contingent student loan. She works part-time at Company A earning £13,500 a year. As she is not earning above the threshold (£22,015 for the 2023/24 tax year), she does not have to make repayments.

In April 2023, she gets another part-time job for Company B, earning £10,000 a year. Note: Company B is not in any way related to Company A.

Even though her total earnings are now £23,500 a year, neither employer has to deduct student loan repayments because each employment is within the £22,015 threshold.

But Caitlin has to file a tax return for 2023/24 as she has also £2,000 of profits from freelance work (assuming Caitlin has already deducted the trading allowance when calculating her profits of £2,000). Her total earnings add up to £25,500 – that is £13,500 from Company A + £10,000 from Company B and £2,000 profits from her freelance work.

This is £3,485 above the £22,015 student loan repayment threshold, so she has to pay 9% x £3,485, £313.65, in student loan repayments through the self assessment system.

Plan 2 repayment calculation under self assessment

Karol has a Plan 2 income-contingent student loan. When he graduated, he took on part-time work with Company A earning £21,500 a year. As he is not earning above the threshold (£27,295 for the 2023/24 tax year), he does not have to make repayments.

In April 2023, he gets another part-time job for Company B, earning £6,000 a year. Note: Company B is not in any way related to Company A.

Even though his total earnings are now £27,500 a year, neither employer has to deduct student loan repayments because each employment is within the £27,295 threshold.

But Karol has to file a tax return for 2023/24 as he has also £2,000 of profits, after taking account of the trading allowance, from freelance work. His total earnings add up to £29,500 – that is £21,500 from Company A + £6,000 from Company B and £2,000 profits from his freelance work.

This is £2,205 above the £27,295 student loan repayment threshold, so he has to pay 9% x £2,205, £198.45, in student loan repayments through the self assessment system.

Plan 4 repayment calculation under self assessment

Poppy, who completed her undergraduate course in June 2022 and started her own business as a self-employed website designer in May 2023, needs to complete a self assessment tax return for the 2023/24 tax year. Poppy has no other taxable income or student loans apart from her Plan 4 student loan.

Poppy’s self-employment profits are £30,000, which is above the repayment threshold of £27,660 for the 2023/24 tax year. She will need to pay student loan repayments of £210.60 for the 2023/24 tax year through the self assessment process (calculated as £30,000 – £27,660 x 9%, so £2,340 x 9%).

Unearned income

Unearned income includes, for example, interest from savings (this is not reduced by the personal savings allowance) or profits from letting out a property (after taking account of the property allowance).

If you have to fill in a tax return and you get more than £2,000 a year in unearned income, this affects how much you have to repay if your total income, including the unearned income, is above the annual repayment threshold.

Importantly, the £2,000 is ‘all or nothing’. This means that if you get unearned income of up to £2,000 in total a year, it is not taken into account at all; but as soon as you go over £2,000, the whole amount is taken into account.

Example: Ryan

Ryan has self-employment profits above his loan plan repayment threshold. He also has exactly £2,000 interest from his deposit in a savings account. Please note the personal savings allowance does not reduce the unearned income when calculating student loan repayments.

In Ryan’s self assessment, none of his savings income is taken into account in calculating his student loan repayments.

However, if Ryan receives an extra £1 of interest on his current account in 2023/24, then under self assessment the whole £2,001 of unearned income is taken into account in calculating his student loan repayments. So now he will pay an extra 9% x £2,001: £180.09.

Information on student loans needed for tax returns

When filling in your tax return, you will need to include the total of any student loan repayments you have already made under Pay As You Earn (PAYE).

If you are using HMRC online services to fill in your tax return, information on your student loan repayments may be pre-populated on your tax return automatically. Check that this information is correct with your own records. If it is not, you can change the pre-populated figures. Your tax return will then be processed with your figures which HMRC will subsequently check, so you should explain why you have entered different loan repayment amounts to HMRC in the additional information box on your return.

Also, although SLC usually get their information from HMRC, you might sometimes need to inform the SLC direct of PAYE repayments you have made, for example, if there is a delay in passing information from HMRC to the SLC.

Please note that student loan repayments are not tax-deductible expenses on your self assessment tax return.

Finding the information

  We would recommend you always keep your payslips.

If you have a single job in a tax year, your form P60 from your employer at the end of the year will show how much has been deducted in repayments.

But if you move from one job to another, the form P45 your old employer gives you does not show the total deductions made in that employment. Your old employer will only have ticked a box on the P45 to indicate to your new employer that student loan repayments should continue being collected.

When you get to the end of the tax year, you will need to work out from the payslips from your old job how much your former employer deducted and add that figure to the amount shown on the form P60 from your new employer.

Example: Dave

Dave does some freelance designing websites, so he needs to fill in a tax return each year. But he also works part-time for an employer. He changes job in August 2023.

His old employer deducted Plan 1 student loan repayments as follows:

  • April 2023: repayment of £25
  • May 2023: repayment of £22
  • June 2023: repayment of £22
  • July 2023: repayment of £26

In May 2024, his new employer gives him his form P60 for the tax year 2023/24 showing total student loan repayments of £213, but this figure does not include the amounts above from Dave’s old job.

When Dave completes his 2023/24 tax return, he has to add together the amounts deducted at both employments to find the total deductions to put on the form.

The total is £308 which is £25 + £22 + £22 + £26 + £213.

The £308 deducted comes off the total student loan repayment he owes for the year.

If Dave had not kept his payslips, he should be able to contact his old employer to ask for the information. However, it is better to keep the information in the first place to avoid having to track it down later. He might also have problems getting hold of the details if, for example, his old employer had gone out of business.

Payment due date under self assessment

Under self assessment, student loan repayments are due on 31 January following the end of the tax year. So, for the tax year ended 5 April 2023, your payment will be due on 31 January 2024.

Student loan repayments are not part of any payments on account you are due to make under self assessment, nor do you need to take them into account if you are working out whether you can claim to reduce your payments on account.

Student loan repayments under self assessment are included with your overall tax and National Insurance contributions (NIC) bill. So if you are late paying, you will face the same penalty for your student loan repayment as the rest of your bill. On our page Tax payment problems and debt, we provide some guidance on what to do if you are having difficulty paying.

Voluntary repayments and overpayments

You can make voluntary repayments direct to the SLC at any time. But if you do so, these payments will not reduce the amount that you have to pay under self assessment and should not be included on your tax return.

If you have made repayments direct to the SLC because you have been working abroad and then complete a self assessment return, HMRC will calculate your loan repayments without considering any direct repayments. We cover what you can do on our page: UK student loan repayments when going overseas.

If, however, you are employed and repayments have been deducted under Pay As You Earn (PAYE) by your employer, these do come off the amount due under self assessment.

However, in certain circumstances a situation may arise in that between the end of the last year and submitting your self assessment tax return you may have moved to repaying your loan directly to the SLC and have subsequently fully repaid your loan. If this is the case, your self assessment tax calculation may generate a student loan underpayment based on your income taxed through the self assessment system. If this happens and you have no further loan balance to repay, it would be advisable to not include information on the student loan repayments section of the self assessment tax return and explain in the additional information section that you have fully repaid your loan between the start of the tax year (6 April) and the date of submitting your tax return.

Example: Jon

Jon is in self assessment because he is self-employed. He starts repaying his student loan by direct debit from May 2023 as he is close to finally paying off the loan and, in fact, fully repays the loan by October 2023.

When he completes his tax return for the tax year 2022/23 close to 31 January 2024 (the due date for online filing), he finds that the online calculation still calculates that he is due to pay student loan repayments. In these circumstances, he can amend his tax return to remove the entries relating to student loan repayments and explain in the additional information box that he has now fully repaid his student loan.

If you think the amount due under the self assessment calculation is too much – that is, you will then be owed money by the SLC, you can contact HMRC to apply for an informal ‘stand over’. This would allow you to pay a smaller amount in the meantime until the position is resolved.

If you do overpay your student loan through self assessment, then the overpayment will be allocated against any other outstanding amounts due such as income tax or National Insurance contributions. If there are no outstanding liabilities, then you can request the overpayment to be repaid.

Budget Payment Plans and student loan repayments

One facility HMRC offer for payment of all self assessment liabilities, including student loan repayments, is a regular direct debit known as a Budget Payment Plan (BPP) or ‘pay weekly or monthly. This allows you to make regular payments, subject to certain conditions.

For student loan borrowers repaying through self assessment, there is, however, a possible disincentive to taking up a BPP. As the effective date of repayment is treated as 31 January following the end of the tax year, your interest will still be clocking up on the outstanding student loan balance even though HMRC have your money early.

Example

Note: this example uses a Plan 2 loan, but the principle is the same for repayments of other income-contingent student loans.

Chas has a Plan 2 student loan and lives in England. He started a new business in 2023/24 and his taxable profits were £28,500, so his tax bill for the year was £3,186. In addition, he had £1,433.70 Class 4 National Insurance contributions (NIC) to pay and £179.40 Class 2 NIC. His student loan repayment was a further £108.45.

On top of that, he has to make payments on account (POAs), for 2024/25 of half of his tax and Class 4 NIC liability for 2023/24 on 31 January and 31 July 2025. Payments on account are not due on Class 2 NIC or the student loan repayment.

The amounts he has to pay come as a bit of a shock to Chas, so he decides to start paying towards the amount he owes on 31 January by entering into a direct debit BPP with HMRC. Luckily, he did his tax return early and his plan was set up in May 2024, allowing him nine months to spread the payment at £802 a month. Of this, £12 a month is his student loan repayment.

Let us look at his total payments in the table below:

Tax
£
Class 4 NIC
£
Class 2 NIC
£
Student Loan
£
Total
£
31 January 2025
Balance for 2023/24 3,186 1,433.70 179.40 108.45 4,907.55
1st POA for 2024/25: half of 2023/24 tax and
Class 4 NIC liability
1,593 716.85 n/a n/a 2,309.85
Amount payable 4,779 2,150.55 179.40 108.45 7,217.40
Split over nine months (May 2024 to January 2025) 531 239 20 12 802
31 July 2025  
2nd POA for 2024/25: half of 2023/24 tax and NIC liability 1,593 716.85 n/a n/a 2,309.85
Amount payable 2,309.85

By paying in instalments under the BPP, Chas’ ‘tax’ bill is therefore cleared by 31 January 2025 and he can go on making regular payments towards his July payment on account if he wishes. HMRC do not give him interest even though he has paid early, but equally none is charged.

But when Chas gets his student loan statement, he will see that the £108.45 he has repaid is only taken off his loan balance at 31 January 2025, even though he parted with the money in instalments over the course of the preceding nine months. Interest is added to the student loan balance at the prevailing rate taking no account of the fact that he had paid the amount due.

So, what could Chas have done instead? Well, he might have considered putting his tax money aside in a separate interest-bearing bank account and paying the balance in full on 31 January. But this does mean he would have to resist the temptation to draw on the funds in the meantime.

Unfortunately, Chas cannot instead pay the £12 a month straight to the SLC as he is not in the last 23 months of repaying his loan. If he were to do so, these would be treated as extra payments and he would then find an unwelcome surprise – that he still has to pay the £108.45 due under self assessment on 31 January 2025 anyway.

More information

There is information on GOV.UK on how to complete the student loan questions on paper and online self assessment tax returns.

The Student Loans Company (SLC) is responsible for all student loan repayments.

The Students Awards Agency Scotland website contains information about what types of funding you can apply for as a Scottish student.

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