HMRC have published new information aimed at taxpayers with student loans to repay. The note is designed to help tackle the issues that can arise when paying back student loans through the PAYE system.

When a taxpayer is near to making the final repayments of a student loan the time lag between an employer's deductions and an annual return can result in overpayments.

The Student Loans Company has introduced a new scheme which will allow taxpayers to opt out of making payments via PAYE in the final 23 months of the loan term. The new alternative scheme is to set-up a direct debit and make agreed monthly repayments. Any taxpayer who fails to make the necessary payments by direct debit will have to revert to making repayments through the PAYE system.