Joseph Ellaway

Hi there, I have a question about how people with regular PAYE income as well as income from freelance work, that would fall into the self-assessment tax process, would calculate how much they should repay on a Plan 2 student loan. If someone has pre-tax income from a regular job, subject to PAYE, of £30k per annum, they would expect to pay 9% of everything over the Plan 2 threshold of £27,295. This would bring their SLC repayment (collected via PAYE) to £243.45 for the tax year. If they also have additional income from freelance work, totalling another £30k after expenses, they would declare this on a self-assessment tax return. Would this additional income from freelance work be subject to 9% over the same threshold of £27,295? Or would the income from both sources be added together, totalling £60k, before taking 9% over the threshold? Broken down, the totals for the two options would be: Option 1) PAYE income: £30k Freelance income: £30k Total income subject to Plan 2 repayment = ( £30k - £27,295 ) + ( £30k - £27,295 ) = £5,410 Total Plan 2 repayment = £5,410 * 9% = £486.90 Play 2 repayments already paid via PAYE = £243.45 Remaining payment to SLC = £243.45 Option 2) PAYE income: £30k Freelance income: £30k Total income subject to Plan 2 repayment = £30k + £30k - £27,295 = £32,705 Total Plan 2 repayment = £32,705 * 9% = £2,943.45 Play 2 repayments already paid via PAYE = £243.45 Remaining payment to SLC = £2,700 I read on the government website that if someone had two regular jobs, paying SLC through PAYE, the thresholds would apply to the jobs separately (i.e. Option 1). Is this the case? And is it also applicable to people with some self-employment income in addition to their regular job? There appears to be a very big difference between the two options. Thanks in advance!