Repaying Student Loans 2009/10 guide discussion

funfree

Hi
Just a thought, if you are running your own business and so are able to decide your own wage can you not set your wage at a point slightly higher than the repayment amount eg £16000 (repayment amount is £15000). Then declare the rest of your earnings in an alternative way that has a lower or even no tax. Therefore you are still making some repayments but keeping them to a minimum.
All thoughts appreciated.

funfree

Also, what happens if you suspend your degree due to personal problems, would you have to make repayments on an incomplete degree?
Regards
ps these are not things I am planning to do, just thoughts from reading posts on other sites as I am planning to pay my loan back in full, its only fair that way.

Oldernotwiser

funfree wrote: »

Also, what happens if you suspend your degree due to personal problems, would you have to make repayments on an incomplete degree?
Regards
ps these are not things I am planning to do, just thoughts from reading posts on other sites as I am planning to pay my loan back in full, its only fair that way.

You have to make repayments at any point where your income goes above £15,000.

funfree

Hi
Just a thought, if you are running your own business and so are able to decide your own wage can you not set your wage at a point slightly higher than the repayment amount eg £16000 (repayment amount is £15000). Then declare the rest of your earnings in an alternative way that has a lower or even no tax. Therefore you are still making some repayments but keeping them to a minimum.
All thoughts appreciated.

Poolie

funfree wrote: »

Hi
Just a thought, if you are running your own business and so are able to decide your own wage can you not set your wage at a point slightly higher than the repayment amount eg £16000 (repayment amount is £15000). Then declare the rest of your earnings in an alternative way that has a lower or even no tax. Therefore you are still making some repayments but keeping them to a minimum.
All thoughts appreciated.

Since you are running your own business everything would have to declared for HMRC for Self Assessment. At this point, HMRC would calculate your Student Loan Liability for the tax year, so paying yourself a salary of £16k would not work as SA is based on profit and you would hvae to declare the earnings as income so you would still be caught.

Nice try but just pay back the loan you have had further your education.

Poolie

funfree wrote: »

Also, what happens if you suspend your degree due to personal problems, would you have to make repayments on an incomplete degree?
Regards
ps these are not things I am planning to do, just thoughts from reading posts on other sites as I am planning to pay my loan back in full, its only fair that way.

Every loan has a repayment start date. If the university does not put through the suspension properly or you do not declare when you going back then the loan would fall into repayment and repayments would be expected.

DesertFlyer

moneyisnotfunny wrote: »

I have a strange issue. I didn't realise the payments were suppose to show directly on our payslips. I thought they came out through our taxes. Anyhow...I need to contact the student loans agency about this, but I am afraid I will be peanalised.

Any advice?

Oldernotwiser wrote: »

Not without more information - what are you querying?

Sorry to bump this.. I have a similar issue and having gone through the forum I'm not sure I can see the answer.

Details:

• I started university in 2001 for 3 years so I think I finished with about £12k or so Student Loan
• My loan was deducted on my payslip at my first two jobs as expected and I got sent a statement each year from The Student Loan Company
• I started a new job in Oct 2007 and since then have had no decutions
• I do not believe I informed my company I had a student loan nor did I inform SLC, however nor had I informed either of my previous two firms
• There has been no contact from the SLC over the past 2 years - I'm not being chased although I probably have a balance of c. £8/9k

My question is what to do?

• I could not inform them and save the £9k or so in a bank account by Aug/Sep 2010 and inform them after this point in which case I have the loan covered anyway
• I could inform them now and start paying approx £210 a month (based upon a UK PAYE calculator) and risk being fined, more aggressively pursued, or an increased repayment schedule

My gut instinct is to risk it for the 9 months, on the basis that they haven't contacted me in 2 years, and save the money in case they do contact me and hopefully have enough in case they demand immediate full repayment (would that happen?), or at least be able to afford an aggresive/increased repayment schedule.

If the interest wasn't 0% then I would repay. I'm completely debt free currently so it would be in my interest to repay if rate is higher than savings.

Any thoughts or recommendations are greatly appreciated in advance!

Oh, and a Merry Christmas and Happy New Year to all!

Oldernotwiser

• I could inform them now and start paying approx £210 a month (based upon a UK PAYE calculator) and risk being fined, more aggressively pursued, or an increased repayment schedule
  

Just to check, do you earn £43,000?

DesertFlyer

Yes £43k base salary.

peterdee_2

I was considering trying to pay mine off more quickly than the standard deducted amount each month, simply to be a debt free quicker, but I think now that the interest rate on the loans is 0%, its better to have the loan as long as possible, as its effectively much cheaper than any other borrowing rate and could therefore save money when taking on more expensive debt (e.g. a mortgage).