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 speeds up National Insurance refunds
HMRC has confirmed that it is using a new automated process to speed up National Insurance refunds. Where its records suggest that someone may have overpaid, HMRC will write to them asking them to check their employment and contribution details before any refund is processed. Could you be due money back?
-
Should you voluntarily payroll benefits in kind?
The window to sign up to voluntarily payroll non-mandatory benefits in kind for 2027/28 will open in November. Is it worth volunteering to pay HMRC earlier than required or should you wait until it becomes mandatory in 2028/29?
-
Wise tax statement errors could affect 4,000 customers
Around 4,000 UK customers of financial services provider Wise have been told that tax statements issued between 2021 and 2025 contained incorrect figures. The errors could have resulted in taxpayers paying too much or too little income tax and capital gains tax (CGT). What should affected customers check?
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.