Paying back Student Loans through Self-Assessment can sometimes lead to errors which can in turn lead to the involvement of HMRC and the Student Loans Company.
When looking at repayment calculations, you initially need to consider which repayment plan you're on.
Plan 1: English and Welsh students who started their course before 1 September 2012, and all Scottish and Northern Irish students. You start repaying when you earn over £18,330. This amount changes each tax year.
Plan 2: English and Welsh students who started on or after 1 September 2012. You start repaying when you earn over £25,000.
The amount that you need to pay will be calculated in your self assessment tax return each year, therefore you pay this at the same time as any Income Tax liability.
You start by totalling all of the relevant income included in your annual return. This will include all employment income, self-employed profits and any unearned income over £2,000 (e.g. dividends).
You will then pay back 9% of your income in excess of the minimum amounts above. Any repayments already made (e.g. from your salary or other employment income) are deducted from this.
If you have made any additional voluntary payments towards your student loan, this will not change the amount that will be due through your tax return- it will still be calculated as per the above.