Student loans & Self Assessment

Having a loan doesn’t, by itself, mean you need to file a return. But if you are filing, you must tell HMRC if you had an eligible Plan 1/2/4 and/or a Postgraduate Loan (PGL) in repayment that year. In Ftax, you simply select your plan(s) in “About You”; we’ll surface the right inputs and do the rest.

• Multiple plans? You can owe both a Plan repayment (9%) and a PGL (6%) in the same year.
• Working abroad? If you’re outside SA/PAYE, you arrange repayments direct with SLC instead.

HMRC starts with all the income that forms your Self Assessment total (and certain benefits). Two nuances to watch:

1. Unearned income rule (£2,000):
   • £0–£2,000 unearned income = ignored in the loan calc.
   • £2,000.01+ unearned income = all of it counts when HMRC checks whether your total income is above your plan threshold.
2. Payrolled benefits in kind (BIK) fix (from 2024/25):
   If your employer “payrolled” benefits that are Class 1A only, they shouldn’t inflate your student-loan bill. HMRC added a specific box to exclude them from the calc. Ftax flags and fills this correctly.

• Tell HMRC your plan (Plan 1/2/4) and/or PGL status in the main SA questions.
• Employment section: enter the total student-loan and PGL deductions already taken via PAYE. If you changed jobs, add the amounts from your old payslips to the figure on your P60 so you don’t under-claim what’s already been deducted.
• Don’t enter voluntary top-ups or overseas direct-debits to SLC; those don’t reduce the SA charge and are handled via SLC separately.

Tip: Keep your P60 and any earlier payslips if you moved employer mid-year. Your P45 doesn’t show totals deducted, just the flag that deductions should continue.

• The student-loan amount sits on your SA bill and is due 31 January following the tax year.
• It is not included in payments on account (POA) and you don’t consider it when deciding whether to reduce POAs.
• Pay late and the same interest/penalties rules as tax/NICs kick in.

Budget Payment Plan? You can drip-feed HMRC through the year, but your loan balance at SLC only reduces when HMRC settles it at 31 January. If you want the balance at SLC to fall sooner, pay SLC directly (note: direct voluntary payments do not reduce the Self Assessment charge).

• You fully cleared the loan after the tax year but before filing: If the SA calc still shows a loan amount, you can remove the student-loan entries and use Additional Information to explain the loan was cleared (date and how), so HMRC/SLC don’t create a duplicate payment.
• You think the SA figure is too high: You can ask HMRC for an informal standover while SLC/HMRC data syncs.
• PAYE + Self-employed: PAYE deductions are offset against the SA amount automatically; enter the correct total so you don’t pay twice.

• Turns on the right questions as soon as you tick your Plan/PGL status.
• Imports employment data and clearly asks for PAYE loan deductions so they offset correctly.
• Builds the calculation with the HMRC rules (9%/6%, £2,000 unearned-income rule, and the payrolled BIK exclusion from 2024/25).
• Warns about common mistakes (entering voluntary SLC payments, missing pre-move payslips, or forgetting a PGL alongside a Plan loan).
• Produces a clean summary so you know exactly what’s going to HMRC on 31 January.

If you’re unsure which plan you’re on, check with SLC before you file. Tell Ftax your plan(s), enter any PAYE deductions, and we’ll handle the thresholds, exclusions, and maths, so your student-loan line is right the first time