Last updated: 14 October 2026
Why does your Self Assessment show a student loan balancing payment you don’t think you owe?
Your Self Assessment calculation works out student loan repayments on your total income for the year, including self-employment, rental, savings and dividend income over £2,000. It then deducts what your employer has already taken through PAYE. A balancing payment appears if your total income is over your plan threshold, or if your payslip deductions haven’t been entered. Errors usually come from not entering PAYE deductions or using the wrong plan type.
2026/27 student loan thresholds
| Plan | Annual threshold | Rate |
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
Common reasons for an unexpected charge
- PAYE deductions not entered. The return must include the student loan deductions shown on your P60
2. The wrong plan. Selecting Plan 2 instead of Plan 1, for example, changes the threshold
3. Unearned income over £2,000. Rent, savings and dividends count if they are over £2,000 in total
4. You have already repaid the loan. The Student Loans Company may not have updated HMRC yet
5. Two plans. Repayments are based on the lowest threshold first
Example
Ella earns a salary of £24,000 and has a £10,000 profit from freelancing, with a Plan 2 loan. Her total income of £34,000 is £4,615 over the Plan 2 threshold, so she owes 9% × £4,615 = £415.35. Her employer took nothing, because her salary is under the threshold, so the full amount is due through Self Assessment on 31 January.
How to fix an error
- Check your P60 for “Student loan deductions” and enter them on the return
- Check the plan type on your Student Loans Company account
- Amend the return online within 12 months of the 31 January deadline
- If you have overpaid, ask the Student Loans Company for a refund once HMRC has passed on the figures
Student loans and payments on account
Student loan repayments are not included in payments on account. The full amount is due on 31 January.
Fixing student loan errors
If your return shows student loan repayments you shouldn’t owe, check your plan type and whether your employer has already collected repayments through PAYE. Enter only the amount deducted by your employer in the right box. If you’ve overpaid, contact the Student Loans Company, not HMRC, for a refund. Keep your loan statements, P60s and your SLC account details together. People with more than one plan, such as a postgraduate loan and a Plan 2 loan, must tick both on their return. Report errors as soon as you spot them. Your SLC online account shows the repayments it has received.
Frequently asked questions
Is the charge a separate bill?
No. It is added to your Self Assessment balance.
I paid off my loan last year. Why is it still charged?
Contact the Student Loans Company with proof of the final repayment.
Can I spread the payment?
Yes, through an HMRC Time to Pay arrangement. See paying a creditor instead of HMRC.
Does pension income count?
Yes, it is part of your total income.
Related: sole trader tax returns.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with student loan errors on tax returns. See our self assessment accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
