News and insights from the Verallo team
When to include payrolled benefits and student loans on your 2024/25 self-assessment
If you’re completing your 2024/25 income tax self-assessment (ITSA) and you have both student loan repayments and payrolled benefits from your employer, there’s an important update to be aware of.
Understanding payrolled benefits
Some benefits provided by employers, known as benefits in kind (BIKs), can now be “payrolled,” meaning the tax due is collected gradually through your salary rather than via an end-of-year P11D form. By April 2027, all employers will be required to payroll BIKs.
Common examples of BIKs that are subject only to Class 1A National Insurance contributions (NICs) include:
- Private dental insurance
- Private medical insurance
- Employer-provided goods or other assets
- Company vehicles
- Fuel for said company vehicles
Why this affects student loans
HMRC has highlighted a problem where payrolled BIKs were incorrectly included in student loan repayment calculations, which could lead to overpayments. To fix this, the 2024/25 ITSA has added a new box on the employment supplementary pages (SA102) so these BIKs can be reported separately from total PAYE income.
How to report payrolled BIKs correctly
If you are repaying a student or postgraduate loan and receive payrolled BIKs subject to Class 1A NICs, follow these steps:
-
Enter your total PAYE income from your P45 or P60 in the standard ‘pay from employer’ box (box 1 on paper forms).
- Enter the total of your Class 1A NIC payrolled BIKs in the new box: ‘Payrolled benefits included in pay which affect your student loan repayments’ (box 1.1).
This ensures your student loan repayments are calculated accurately and avoids unnecessary overpayments. HMRC provides examples and guidance for completing this section.
Need help with your self-assessment?
At Verallo, we can guide you through your tax return, making sure payrolled benefits are reported correctly and your student loan repayments are accurate. Contact us today to speak to our tax experts.