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# Student Loan Repayments When Self-Employed
If you went to uni before getting into the trades, your student loan doesn't disappear because you're self-employed. It comes out through your Self-Assessment tax return instead of your payslip. And it can be a nasty surprise in January if you haven't planned for it.
Rule of thumb: your student loan repayment gets added to your January tax bill. If you don't know which plan you're on, find out now before it bites you.
Which Plan Are You On?
| Plan | Started Uni | Threshold (2025-26) | Rate |
|---|---|---|---|
| Plan 1 | Before Sept 2012 (England/Wales) or any time (Scotland/NI) | £26,065 | 9% |
| Plan 2 | Sept 2012 onwards (England/Wales) | £28,470 | 9% |
| Plan 4 | Scotland (post-2024 change) | £32,745 | 9% |
| Plan 5 | Sept 2023 onwards (England) | £25,000 | 9% |
| Postgraduate Loan | Any postgrad loan | £21,000 | 6% |
You can have more than one plan running at the same time. A postgraduate loan stacks on top of your undergraduate one.
Check your plan type at gov.uk/sign-in-to-manage-your-student-loan-balance or call the Student Loans Company.
How It Works When Self-Employed
When you're employed, your employer deducts it from your wages automatically. Self-employed, it gets calculated as part of your Self-Assessment and added to your tax bill.
You pay 9% of everything you earn above your plan's threshold.
Example: A spark earning £30,000 profit on Plan 2. That's 9% of (£30,000 minus £28,470) = 9% of £1,530 = £137.70 on top of your January tax bill.
Doesn't sound like much on its own. But stack it up with everything else.
The January Shock
Here's what catches people out. Your January bill isn't just tax. It's everything at once.
Example for a subbie on £35,000 profit, Plan 2:
- Income tax: roughly £3,500
- National Insurance (Class 4): roughly £1,200
- Student loan: roughly £590
- Total: around £5,290 in one hit
If you're also making Payments on Account for next year, that bill nearly doubles.
Tip for new starters: open a separate savings account and put 30% of everything you earn into it. That covers tax, NI, and student loan. Don't touch it until January.
When Does It Get Written Off?
Your loan gets written off eventually, even if you never pay it all back.
- Plan 1: 25 years after the April you were first due to repay
- Plan 2: 30 years after the April you were first due to repay (40 years for loans taken from Sept 2023)
- Plan 4: 30 years after the April you were first due to repay
- Plan 5: 40 years after the April you were first due to repay
- Postgraduate: 30 years
Most people never fully repay. The government knows this.
Should You Overpay?
Almost certainly not.
Martin Lewis has been saying this for years and the maths backs him up. Unless you're a high earner who will definitely clear the full balance before it gets written off, overpaying just means you pay back money that would have been forgiven anyway.
The interest rate on Plan 2 loans can be high (up to RPI + 3%), but that doesn't matter if the balance gets written off. You're not paying interest on a mortgage you chose. You're paying a graduate tax that expires.
Tip for new starters: don't let anyone talk you into overpaying your student loan to "clear the debt." Run the numbers first. For most tradespeople earning £25k-£45k, it makes zero financial sense.
Where It Goes on Your Tax Return
On the SA100 form, there's a specific student loan section. You tick which plan you're on and enter your profit figure. HMRC calculates the repayment.
If you use an accountant, make sure they know you have a student loan. Some forget to ask, and then HMRC adds it later with interest.
If you've fully repaid your loan, contact the Student Loans Company to get a "no longer due" letter. Otherwise HMRC will keep charging you, and getting overpayments back takes months.
Common Mistakes
- Not knowing which plan you're on. Different thresholds mean different amounts owed.
- Forgetting to tell your accountant. They can't account for what they don't know about.
- Overpaying voluntarily. See above. Almost never worth it.
- Not budgeting for it. Your student loan payment is real money out of your pocket in January. Treat it like any other bill.
- Ignoring it after repayment. If you've paid it off, get the confirmation letter or you'll keep paying.
Sources
- Student Loans Company, "Repayment thresholds 2025-26"
- HMRC, "Self-Assessment: student loan repayments"
- gov.uk, "Repaying your student loan"
- MoneySavingExpert, "Should you overpay your student loan?"
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