Unemployment & repayments

Barnsey737200

Hi everyone,

First post on this glorious forum :beer:

In the last tax year I had been repaying my student loan, about 80 quid a month. However since Dec 08 i've been unemployed and had no income for them to deduct the repayment from. My P45 states "y" for continue deducting student loan. My earnings for the tax year 08-09 were a measly £12,700.

I should hopefully be starting employment in the next month, so will my repayments automatically be deducted from my first paycheck, or will they have to re-assess whether I fall under the minimum income bracket? Just a little confused and you know what the SAAS are like for getting back to ya :rolleyes:

Muchos gracias

MrsManda

I think, providing you give a P45 to your new employer the HMRC assess your income and only take repayments after you're earning the equivalent of 15k a year. As far as I'm aware, it's done on a monthly basis so if one month you earn over £1250 then you will pay something towards your student loan. This will be why you paid student loan contributions last year even though overall you didn't earn 15K due to being made redundant.

It's the reason I have paid a tiny amount of my student loan back (prior to becoming a student again) despite never earning over 10K in a 12mth period - one month I did a pile of overtime and earnt 2500 K so paid student loan contribution.

eljmayes

You can claim it back if your earnings don't total 15k per year- you do need P45s though and be warned that they won't exactly be lightning fast in giving you the cash. There are rumours that the loan contribution will go down to 8.5% but start lower down (around 13-14k) as soon as the NI rate goes up to 11.5% to dovetail it.