Scottish student loan repayments and your tax return
Scottish student loan borrowers may be making repayments under ‘Plan 4’ from the 2021/22 tax year onwards. This article explains who falls under Plan 4 and how the loan repayments are calculated. It also covers what student loan information you need to put on your tax return and where you can find further guidance.
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Who makes Plan 4 repayments and how much are they?
Loans awarded by the Student Awards Agency Scotland (SAAS) are treated as a Plan 4 loan from the 2021/22 tax year onwards. This includes borrowers who have finished their course in the summer of 2021 onwards and borrowers who had been repaying their loans under Plan 1 previously.
Plan 4 student loan repayments are due if you have earnings over the repayment threshold, which was £25,000 for the 2021/22 tax year (£25,375 for 2022/23). They are calculated at a rate of 9% on earnings over the threshold. So, if you earned £28,000 in the 2021/22 tax year then your Plan 4 loan repayments would be: £28,000 minus £25,000 at 9%, so £270.
Earnings include income from employment and self-employment. However, if you earn above the Plan 4 threshold and have unearned income above £2,000 (such as rental profits or savings income) then this income will also be included when calculating Plan 4 repayments. We cover this in more detail on at Plan 4 student loans.
What do I need to include on my tax return?
HMRC will collect your student loan repayments through the tax system unless:
- you are abroad for more than three months and are making direct payments to the Student Loans Company; or
- you have almost finished repaying your student loan so have switched to Direct Debit payments to the Student Loans Company.
Not everyone has to submit a Self Assessment tax return. We cover who does at Do I need to complete a tax return?. If you do need to submit a tax return and have a Plan 4 student loan, then your loan repayments will be calculated as part of your tax return and are due by the usual payment date (31 January after the end of the tax year).
When you complete your 2021/22 tax return, you will need to include information such as:
- your student loan plan type; and
- the amount of any loan repayments deducted from your earnings through PAYE.
If you use HMRC online services to complete your tax return, then the above information should be pre-populated, but you should check that it is correct.
You should not include any voluntary payments made directly to the Student Loans Company.
Where can I find more information on repaying my Plan 4 student loan?
Our Plan 4 student loans page contains further guidance on how the loans are repaid if completing a Self Assessment tax return and how repayments are calculated if you have more than one type of loan.
If you are going abroad for more than three months, then our separate guidance explains what you need to do about your repayments.
GOV.UK and SAAS have information on repaying Plan 4 loans including making voluntary repayments. Also, there is information on GOV.UK on how to complete the student loan questions on paper and online Self Assessment tax returns.