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Step-by-step Guide

All you need to know about Student and Postgraduate Loan repayments

Article ID: 2159
Last updated: 25 Jul, 2023

By clicking on the below links, it will take you directly to that section of the article:

#Student Loan calculation summary now shown in TaxCalc:
#Multiple Plans - combination of Plan 1, 2 & 4
#Introduction of Plan 4 for Scottish students (from April 2021):
#SLC online service for SL and PGL:
#Overview:
#Payment Thresholds:
#Filling in a Tax return if you are repaying a SL or PGL
#Review of SLC loan repayment calculations for a SL and PGL
#Loan was paid off during tax year through PAYE deductions
#2018-19 tax returns and earlier year

Student Loan calculation summary now shown in TaxCalc:

From the 2020-21 tax year onwards, the software shows a summary of the SL/PGL calculation which can be reviewed or printed. To access the summary, please go to Check & Finish and either select Review or Print.

Multiple Plans - combination of Plan 1, 2 & 4

For loans under both Plan 1 or Plan 2 or Plan 4, you must select Plan 1 as HMRC’s calculations only allow for one plan type. The SLC will then allocate repayments as required to both loans.

Introduction of Plan 4 for Scottish students (from April 2021):

You will have a Plan 4 student loan if you have drawn down a loan from the Student Awards Agency Scotland (SAAS), usually meaning:

  • You lived in Scotland when you started your course (on or after 1 September 1998)

  • You are a Scottish student who started your course anywhere in the UK (on or after 1 September 1998)

From April 2021, Scottish students who were on Plan 1 were moved to Plan 4.

For the 2019-20 and earlier tax year Plan 1 would apply.

SLC online service for SL and PGL:

Loan repayments to the Student Loan Company (SLC) had, until recently major drawbacks.

If a SL was paid off during the tax year through PAYE deductions, HMRC would still (via the SA100 tax return) calculate an SL repayment amount based on the total income in the tax year.

The way to avoid a calculated overpayment was to switch to Direct Debit (DD) payments for the final 24 months or so. The SLC would write to the taxpayer offering a DD option.

Often this never happened or the taxpayer did not setup a DD and this could result in the overpayment scenario above, see also ‘Loan was paid off during the year’, below.

To overcome these issues the SLC introduced an online service which allows graduates and postgraduates to view their balance and decide themselves when to switch to DD payments for the outstanding SL or PGL.

The SLC, instead of being ‘updated’ yearly (from HMRC Payroll data), now receives more frequent details of the deductions made via PAYE during the year, making the online service more up to date.

https://www.gov.uk/government/news/slc-launches-new-online-repayment-service

https://www.gov.uk/sign-in-to-manage-your-student-loan-balance

Overview:

The student loan repayment due for the year is calculated from your income in the tax year NOT the amount of debt remaining.

The calculated repayment amount will be a percentage of all net adjusted income (above a threshold). For any SL types the percentage is 9%, for PGL it is 6%

If you are employed, loan deductions made through PAYE will be sent to the SLC on a regular basis. Other types of income (self-employed, savings, interest, property etc) may also result in a payment being due, or an additional payment (on top of any employment deductions already made).

Any voluntary payments made directly to SLC must NOT be entered on the tax return, they will only reduce the overall debt (hence the loan will be cleared earlier).

Payment Thresholds:

The income thresholds for triggering repayments to SLC for each type are:

Tax Year Plan 1 Plan 2 Plan 4 Postgraduate
2022-23 £20,195 £27,295 £25,375 £21,000
2021-22 £19,895 £27,295 £25,000 £21,000
2020-21 £19,390 £26,575 - £21,000
2019-20 £18,935 £25,725 - £21,000

For additional information see the HMRC guidance.

Filling in a Tax return if you are repaying a SL or PGL

Including entering any employment SL or PGL deductions through PAYE

SimpleStep mode

Progress through your tax return as normal entering figures as required

  1. If you were Employed: Complete all employment pages as required from your P60
    Complete the page, Pay received and tax paid
    Enter any loan deductions from your P60 in the boxes.
    Student loan repayments deducted by your employer
    and/or
    Postgraduate loan repayments deducted by your employer
  2. Progress through your tax return, until you reach the screen Working out your tax
    Tick the box Do you have a student loan and/or postgraduate loan?
    Next Step to the screen Student & Postgraduate loan repayments
    Select the plan type from Which student loan repayment plan are you eligible for?
    For loans under both Plan 1 or Plan 2 or Plan 4, you must select Plan 1 as HMRC’s calculations only allow for one plan type. The SLC will then allocate repayments as required to both loans.
    And/Or
    Tick the box Do you have a postgraduate loan?
    Notes:
    Do NOT change any figures if shown in the white boxes on this screen.
    They are loaded from the employment page(s)
    Do NOT include any voluntary payments made directly to SLC.
    These will only reduce the overall debt (hence the loan will be cleared earlier).
    They must NOT be entered on the tax return.

HMRC Forms Mode

  1. Complete the tax return as required using the Navigation Menu to select sections
    Employment: Complete the employment page(s) if needed from your P60
    See next steps to enter any SLC deductions
  2. Entering SL and PGL details
    From the navigation menu, select SA100 Core Return > Page 5
    In the section Student Loan and Postgraduate Loan repayments
    Tick Box 1, If you’ve received notification…
    Then if you are on a
    SL repayment plan:
    Select the Plan type from Which Student Loan Repayment Plan are you eligible for?
    For loans under both Plan 1 and Plan 2 or Plan 4, you must select Plan 1 as HMRC’s calculations only allow for one plan type. The SLC will then allocate repayments as required to both loans.
    PGL repayment: Tick the box Do you have a Postgraduate Loan
  3. Then, if you were employed, use the details from your P60 and
    Enter the total amount of SL deductions (from all employments if more than one) in Box 2
    Enter the total amount of PGL deductions (from all employments if more than one) in Box 3
    (Do NOT include any voluntary payments made directly to SLC.)
    OR
    If you were NOT employed, any repayment amounts will be made based on other income
    See Review details below
    Do NOT enter any voluntary payments made directly to SLC

Review of SLC loan repayment calculations for a SL and PGL

The 2022-23 software shows a summary of the calculation which can be reviewed or printed.

Check & Finish > Review OR Print

The student loan repayment due for the year is calculated from your income in the tax year not the amount of debt remaining.

P60 SLC deductions will have been received SLC and they must be entered on the tax return.

Other types of income (self-employed, savings, interest, property etc) may also result in a payment being due, (or an additional payment on top of employment deductions already made).

The calculated repayment amount will be a percentage of all net adjusted income (above a threshold). For any SL types the percentage is 9%, for PGL it is 6%

The SA302 will show the calculated SLC repayments due for SL and PGL

If you only have employment income then the calculated amount may sometimes match the amount deducted by your employer exactly and no SLC entry will be shown on the SA302.

The summary uses details from the HMRC Tax Calculation Summary, Section 21, pages 48-51 (from Check & Finish > Review).

If your loan was paid off under PAYE during the tax year then HMRC’s SLC calculations may create an overpayment to be paid by January 31.

This is because HMRC applies the calculations of repayments to the whole tax year, even if the loan was paid off part way through the year. You can't amend the calculations on your tax return because they must match the HMRC calculations to file successfully online.

If this is the situation then you should contact SLC to discuss the best way to sort this out

0300 100 0611 England, Scotland or Northern Ireland

0300 100 0370 Wales.

You may also need to speak to HMRC to clarify any amounts to actually pay by January 31st rather than what is ‘calculated’ to pay. It may be suggested that you submit your SA100 tax return online as soon as possible to assist with this.

2018-19 tax returns and earlier years

Before the changes made for 2019-20, previous years returns had a tickbox
‘If you think your loan may be fully repaid within the next 2 years’

This was used to indicate to HMRC/SLC that the advisory to switch to DD payments should be sent. However as outlined at the top of the page this system was unreliable.

As such it is NOT necessary to indicate this on any late original or amended submissions as this should now be dealt with through the taxpayers SLC account

Article ID: 2159
Last updated: 25 Jul, 2023
Revision: 29
Views: 10875
This article was:  


Also listed in
folder Tax Return Production -> SA100 Individual Return