HMRC systems are unable to differentiate between certain types of income, which has led to some people overpaying their student loans. However, at present this is only affecting individuals who submit self-assessment tax returns.
Anyone who does a self-assessment tax return and has a student loan knows that the student loan repayment is calculated on the tax return based on your total income. Under normal circumstances this is straightforward, but HMRC has confirmed that their systems are including benefit-in-kind as part of the calculation, even though student loan deductions are not due on any benefits-in-kind.
For the time being, HMRC has issued a work around while any shortcomings are being addressed, we have included the HMRC link.
Tell HMRC about a student or postgraduate loan in your tax return – GOV.UK (www.gov.uk)
Should you have any questions or think you have overpaid a student loan please get in contact with us.
