Workaround for botched HMRC student loan repayment calculations
HMRC systems cannot differentiate between certain types of income which could lead to an overpayment of student loan deductions. What’s the solution?
If you make student loan repayments and you’re also within the self-assessment regime, you’ll be aware that any student loan repayments due on additional (typically non-PAYE) income are calculated and collected via your tax return. This would ordinarily be straightforward, but HMRC has confirmed that, despite student loan deductions not being due on benefits-in-kind, its systems are incorrectly including such income in the calculations. This means that affected individuals will end up paying higher student loan payments than is necessary. Therefore, if you’re in self-assessment and you have payrolled benefits in kind, such as a company car or private medical insurance, you will need to follow HMRC's guidance to ensure the student loans figure is calculated correctly. The current workaround is in place until shortcomings in HMRC systems can be addressed.
Related Topics
-
HMRC updates advisory fuel rates from 1 March 2026
HMRC has published the latest advisory fuel and electric rates (AFRs) for company cars, effective from 1 March 2026. Several rates have changed since the previous quarter. What should employers be aware of?
-
5 April deadline approaching for key tax relief claims
With the end of the 2025/26 tax year now less than seven weeks away, business owners and company directors should remember that several valuable reliefs and elections must be made before 5 April. Which opportunities are about to close?
-
HMRC reminds employers about payrolling benefits deadlines
HMRC is reminding employers of key dates and preparations ahead of the transition to real-time payrolling of benefits in kind (BiKs). With an important voluntary registration deadline approaching, what do payroll teams need to know?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.