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Reporting student loans under Making Tax Digital
- Sara White
- Aug 7
- 3 min read
HMRC has clarified how to report student loans under new Making Tax Digital (MTD) rules for earners with over £50,000 in qualifying income, including buy to let landlords and self employed, from August.
The latest agent update, HMRC set out how to deal with student loans under MTD, another complexity of the new mandatory quarterly reporting system.
Based on the assumption that the individual taxpayer is using MTD software, which may of course not be the case with the high number of unrepresented taxpayers caught by the new quarterly reporting regime, HMRC set out the approach to use.
Self employed, sole traders and landlords have to report quarterly income from self-employment and property rentals to HMRC if their qualifying income exceeds £50,000.
The MTD software will hold details of the taxpayer’s student loan plan type (1, 2, 4 or 5) or postgraduate loan, or both, using information from the Student Loans Company and sent to HMRC.
Quarterly updates calculate an estimate of student or postgraduate loan or both repayments based on the taxpayer’s income and the applicable thresholds at that time. These estimates are not payable.
After the fourth quarterly update, the taxpayer with the student loan must file an annual self assessment tax return. MTD software will calculate the actual student or postgraduate loan charge on the tax return using the applicable annual threshold. This replaces the estimates from the quarterly updates.
‘This final amount is included in overall tax liability, which is due to be paid by 31 January, following the end of the tax year and sent to the Student Loans Company,’ HMRC stated.
If a student holder under MTD also has a PAYE employment and had PAYE student or postgraduate loan or both deductions taken by their employer, these amounts are pre‑populated and offset against the quarterly estimate and the final amount, HMRC said. This can create issues so check carefully that all the numbers are correct and as expected.
The best place to view student loan information – account balances and repayments – is in the taxpayer’s individual Student Loan Company (SLC) account. The HMRC app and personal tax account only shows PAYE and self assessment tax account details.
A standard year end self assessment tax return is required in addition to MTD quarterly updates, and HMRC warns taxpayers to check the SA return in case adjustments need to be made.
In the guidance, HMRC stated: ‘Before submitting your tax return using Making Tax Digital software, you may need to make adjustments or add any other income. Your student and postgraduate repayment will be calculated on your total annual income above the relevant annual plan or loan threshold.
‘Your student and postgraduate loan charge will:
replace any estimates calculated when you submitted your quarterly updates
be included in your total tax liability
be due to be paid by 31 January, following the end of the tax year
be sent to the Student Loans Company to be applied against your loan balance’.
Registration deadline
The first MTD quarterly reporting filing deadline for update 1 for the £50,000 cohort is Friday 7 August 2026.
So it is imperative to sign up to the system, unless exempt, and get ready for the first filing date. But you’re not alone, several hundred thousand affected taxpayers have not signed up yet, according to official HMRC figures, and many are unrepresented, which means they do not use an accountant. Also bear in mind penalties are being waived in year one only.
Useful links
HMRC guidance, Student or postgraduate loan in tax return
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