Help With Student Loans - HERE!

KittyPop

Please can you clarify "taxable income" as I have been given numerous contradictory versions. My understanding of taxable income is gross minus pension minus personal allowance. Many thanks

silvercar

KittyPop wrote: »

Please can you clarify "taxable income" as I have been given numerous contradictory versions. My understanding of taxable income is gross minus pension minus personal allowance. Many thanks

From the gov website, source

If you're an employee, your income is your taxable pay:

plus any pension contributions
minus any benefits you get from your employer that are taxed through payroll (ask your employer if you're not sure)

Ed-1

KittyPop wrote: »

Please can you clarify "taxable income" as I have been given numerous contradictory versions. My understanding of taxable income is gross minus pension minus personal allowance. Many thanks

Student loan repayments for ICR loans are taken on NICable income not taxable income.

This means, among other things, that you get the full benefit of the threshold per job unless you have to fill in a tax return.

E.g. earn £15,000 in job 1 and £15,000 in job 2. Student loan repayments due = £0.

Mrs_Arcanum

Our income has dropped dramatically this year due to my husband taking early retirement.

When I sent off the P60 copies for 15/16 I attached a letter advising our income has dropped. Mr A got an odd phone call from Student finance that claimed they will still look at past income when assessing student loans. This seems to be somewhat bizarre, as you support your children to cover the shortfall from current income, not that from a couple of years ago. Yet I know you can apply for a redetermination of income if it drops more than 15%. Now we are left somewhat panicked that our sons maintenance loan will not even cover his rent, let alone leave him something to live on and we will be expected to make up the difference from income we no longer have.

silvercar

Ed-1 wrote: »

Student loan repayments for ICR loans are taken on NICable income not taxable income.

This means, among other things, that you get the full benefit of the threshold per job unless you have to fill in a tax return.

E.g. earn £15,000 in job 1 and £15,000 in job 2. Student loan repayments due = £0.

That isn't true. You won't be taxed at source, but you will have to make up the payment. See here from the same source I quoted above):

"If you have 2 or more jobs
Your employers will deduct repayments from your salary - but only for the jobs where you earn over the minimum amount.

HMRC may send you a tax return to make a self assessment of the repayments you owe for the whole year. You’ll need to pay 9% of all your income over the threshold - but any repayments you’ve already made from your salary will be deducted from this.

Keep all your payslips and P60 - you’ll need them if you claim a refund."

silvercar

Mrs_Arcanum wrote: »

Our income has dropped dramatically this year due to my husband taking early retirement.

When I sent off the P60 copies for 15/16 I attached a letter advising our income has dropped. Mr A got an odd phone call from Student finance that claimed they will still look at past income when assessing student loans. This seems to be somewhat bizarre, as you support your children to cover the shortfall from current income, not that from a couple of years ago. Yet I know you can apply for a redetermination of income if it drops more than 15%. Now we are left somewhat panicked that our sons maintenance loan will not even cover his rent, let alone leave him something to live on and we will be expected to make up the difference from income we no longer have.

You will need to apply for a redetermination of income.

Feelea28

Hi, my son started uni 4 years ago but dropped out towards the end of his first year.
The September of that year he started a degree at another university- the student loan company have been hounding him to pay his student loan for that first unfinished year even though he’s still a student ( he works weekends and earns around £400 a month) we’ve had letters and calls from debt collectors, we offered to pay monthly and at first they refused but we pay so much off a month. Can they do this even though he’s still a student? They say it’s perfectly acceptable but we don’t think it’s right.

silvercar

Feelea28 wrote: »

Hi, my son started uni 4 years ago but dropped out towards the end of his first year.
The September of that year he started a degree at another university- the student loan company have been hounding him to pay his student loan for that first unfinished year even though he’s still a student ( he works weekends and earns around £400 a month) we’ve had letters and calls from debt collectors, we offered to pay monthly and at first they refused but we pay so much off a month. Can they do this even though he’s still a student? They say it’s perfectly acceptable but we don’t think it’s right.

Sounds like they are saying he received more loan than he was entitled to, given he withdrew during the year. So they want the overpayment back. This is the only reason I can think of that they would hassle him. It isn't a standard pay back 9% on everything over xx threshold, but a claim for the overpayment.

They should only be claiming the excess over his entitlement, that is calculated on the portion of the year he was no longer a student. It is based on the date he formally withdrew. Check their calculation.

That said, it is his debt not yours. They can't get blood out of a stone, so he should provide proof of his student status to them and negotiate a reduced payment schedule.

Ed-1

silvercar wrote: »

That isn't true. You won't be taxed at source, but you will have to make up the payment. See here from the same source I quoted above):

It's only if you are required to submit a tax return that the aggregate income is subject to loan repayments.

HMRC don't require tax returns solely for student loan repayments.

See:

https://www.whatdotheyknow.com/request/student_loan_plan_types#incoming-1066779

Where a borrower has 2 employers, in both of which earnings are under the threshold, there will be no deductions taken, even if the borrower’s income for the year is over the repayment threshold. This is confirmed on the gov.uk website at
https://www.gov.uk/guidance/special-rules-for-student-loans#employee-has-more-than-one-job

If a borrower is not otherwise required to submit a tax return to HMRC, there is no requirement for the customer to submit a tax return solely for the purpose of student loan repayments.

silvercar

Ed-1 wrote: »

It's only if you are required to submit a tax return that the aggregate income is subject to loan repayments.

HMRC don't require tax returns solely for student loan repayments.

See:

https://www.whatdotheyknow.com/request/student_loan_plan_types#incoming-1066779

Where a borrower has 2 employers, in both of which earnings are under the threshold, there will be no deductions taken, even if the borrower’s income for the year is over the repayment threshold. This is confirmed on the gov.uk website at
https://www.gov.uk/guidance/special-rules-for-student-loans#employee-has-more-than-one-job

If a borrower is not otherwise required to submit a tax return to HMRC, there is no requirement for the customer to submit a tax return solely for the purpose of student loan repayments.

Interesting. A couple of questions:

1. Hmrc will realise that the customer is over the threshold from the P60s. Will that then trigger slc repayments as salary deductions in the following tax year? ie hmrc sees total pay in year is over threshold and could notify one employer to make the deductions?

2. Event though no paye deductions have been made, would the customer be liable for the repayments anyway. I'm thinking the parallel is someone working overseas and needs to arrange the payments themselves.