The Issue:
HMRC's tax system is having trouble with certain benefits that some employers provide, like cycle-to-work schemes or private healthcare. These benefits, called "benefits in kind," aren't always treated correctly when calculating student loan repayments.
Who's Affected:
This problem impacts people who:
1. Have student loans
2. File self-assessment tax returns
3. Receive benefits in kind from their employer that don't require National Insurance contributions
The Good News:
HMRC knows about this problem and is working on fixing it. In the meantime, there's a way to make sure you're not overpaying.
How to Avoid Overpaying:
When filling out your online tax return, follow these steps:
1. Find the total value of your benefits in kind (check your P60 form or ask your employer)
2. Subtract this amount from your total PAYE income
3. Enter this new, lower figure in the "pay from employer" box
4. Select "yes" when asked about taxable benefits
5. Enter the value of your benefits in kind in the "other benefits" box
6. In the "additional information" box, write: "I have entered my payrolled benefits in kind in the 'other benefits' section as I'm a student loan borrower"
By following these steps, you can ensure your student loan repayments are calculated correctly, potentially saving you money.
MCC Partners can help!
Remember, tax matters can be complex, and it's important to get them right. If you're unsure about any part of your tax return or need help with this student loan issue, don't hesitate to contact us at MCC Partners. Our team of experienced accountants is here to guide you through the process, answer your questions, and ensure you're not overpaying on your student loan repayments. We're committed to helping you navigate these tax complexities with ease and confidence.
