How do I repay my student loan when self-employed?

Through your Self Assessment tax return. HMRC charges 9% of your yearly income over your plan's threshold, or 6% for a Postgraduate Loan, and you pay it with your tax by 31 January. In 2026-27, Plan 2 starts at £29,385.

There is no payslip to take it from, so nothing is collected during the year. The Student Loans Company (SLC) tells HMRC which plan you are on, you confirm it on your return, and HMRC adds the repayment to your tax bill.

The 2026-27 thresholds

Thresholds change on 6 April each year. Plan 2 covers most undergraduate courses started in England between 1 September 2012 and 31 July 2023, or in Wales from 1 September 2012. Plan 1 covers older loans and Northern Ireland, Plan 4 is Scotland, and Plan 5 covers undergraduate courses started in England from 1 August 2023. Your online SLC account shows your plan. The amount you owe has no effect on what you repay each year: it is worked out on income alone.

What counts as income

For Self Assessment, HMRC adds together:

• your self-employed profit, after allowable costs
• any PAYE pay, from all jobs combined, even if each job was under the threshold
• property income
• unearned income over £2,000

For a tradesperson, that means profit, not turnover. Every allowable cost you record, from materials to van running costs, lowers the figure the 9% is worked out on.

If you pay both a student loan and a Postgraduate Loan, you repay both: 9% over your plan threshold and 6% over £21,000, so every pound of income above both thresholds costs 15p in repayments.

A worked example with CIS

A self-employed plasterer on Plan 2 is paid £45,000 for labour before CIS deductions in 2026-27, with £6,615 of costs. He lives outside Scotland, has no other income and has the full personal allowance.

The student loan is included in the total on the return, so the CIS deducted during the year goes towards it. Without a student loan, he would have been overpaid £2,288.10, so the loan takes £810 off what comes back. Before you join Making Tax Digital, over-deducted CIS is claimed back through your Self Assessment tax return. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return, and any refund is requested separately through HMRC online services. Either way, the sooner after 5 April the return is filed, the sooner HMRC can repay you.

What this means for you

If you are not under CIS, nothing is taken during the year, and the whole repayment lands in January. GOV.UK says it goes into your balancing payment, due by 31 January, so put money aside each month. On the example above, £810 is £67.50 a month.

If you also have a job, your employer takes repayments from your pay when it is over the monthly threshold. Those amounts are listed on your payslips and P60. Enter them on your return, and HMRC deducts them from what you owe.

From the tax year you join Making Tax Digital for Income Tax (MTD), your software shows your plan and, once your income in your quarterly updates is over the threshold, estimated repayments. GOV.UK says these estimates are for information only and do not reduce your loan balance. The real charge is worked out in your tax return.

Steps to repay through Self Assessment

1. Sign in to your SLC account and check your plan type.
2. Keep your records so your profit is right, with every allowable cost included.
3. On your tax return, confirm your plan type in the student loan section.
4. If you had a job, enter the student loan deductions shown on your P60 or payslips.
5. Check the student loan figure in your tax calculation before you submit.
6. Pay it with your balancing payment by 31 January after the tax year ends.

Use the free MTD check to see when quarterly updates start for you, and the trades section for more guides for the building trades.