Limited Companies and Student Loan Repayments

Knowledge base from Boox

By Lynne Gowers on 30th July 2013

Limited Companies and Student Loan Repayments

Do you have an outstanding Government Student Loan? Are you unsure on how or when you need to pay this now that you are a director of your limited company?

If you have answered yes, we suggest you read on.

Am I liable to pay my student loan now that I am a director of a limited company?

Yes, as a Director of a Limited Company you still have an obligation to make payments to The Student Loans Company.

How are these repayments calculated?

As a shareholder and employee your gross personal income is made up of your gross salary and gross dividend payments from your Limited Company.  There are now two different plans where Student Loan Company require repayments of loans, which are dependant on when you take out the loan.

Plan 1 (if the loan was taken out prior to 1st September 2012) – when an individual’s gross personal income exceeds £17,335 per year.

Plan 2 (if the loan was taken out after 1st September 2012) – when an individual’s gross personal income exceeds £21,000 per year.

The amount payable is calculated at 9% of the income that exceeds each threshold.  There are also wider complexities should you have loans which apply to each plan, with more information available via the following links:,6678511&_dad=portal&_schema=PORTAL,6678784&_dad=portal&_schema=PORTAL

How and when do I make the payments for my Student Loan?

Unlike PAYE, deductions are not made on a regular basis from your income. The amount payable gets calculated on your self-assessment tax return and the liability is then paid to HMRC along with any PAYE and NI tax that is due. HMRC will then send the repayment to The Student Loans Company.

Let The Student Loans Company know your change in circumstances

You will need to notify The Student Loans Company of any change in your circumstances. As a Limited Company Director and shareholder they will then typically ask for your Unique Tax Reference (UTR) Number. If you have already registered for your self-assessment tax return by completing a HMRC SA01 form then this number would have been sent to you by HMRC.

Here at Boox we like to give our clients as much help as possible with their finances, to help us achieve this please be sure to tell your dedicated accountant if you have a Student Loan liability. This will then allow us to incorporate an estimated Student Loan liability within your quarterly company health check.

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