Repaying Student Loans 2009/10 guide discussion

ncjharris

Thanks for the comments all - I've worked out what it is.

Midway through the last tax year the SLC wrote to me to say that as I was due to pay off my loan in the next 18 months I should switch to paying by Direct Debit rather than through deduction at source (i.e. through employer).
However, the self assessment does not discriminate between this, so it only looks at the payments taken by my employer (i.e. on my P60), yet calculates based on my income what I should have paid - this is what is added in my calculation.

After a bit of research on the HMRC website it says that this is the first year that this has been done and that there is a 'validation' exercise between the HMRC and the SLC if the loan is to be paid off in the next couple of years to check that by including this in my SA I won't be over paying (which I would be).

http://www.hmrc.gov.uk/leaflets/csl1.pdf This leaflet explains.

According to this they would correct the amount due after speaking to the SLC, but I'm going to ring on Monday just to double check!

ncjharris

Thought I would post an update on my situation above in case anyone else has it.

I spoke to HMRC on a couple of occasions after I completed my SA and they were not too helpful; didn't understand and told me that if the SA site had told me the money was due then it was due - even if it would mean an overpayment (which this would).

I spoke to the SLC who were more than helpful (and had a considerably shorter time to wait to have my call answered!). They acknowledged that I was paying them direct (i.e. rather than through PAYE & HMRC) and that the HMRC wouldn't know about this amount. They contacted HMRC direct to let them know that I had made the payments and that I wasn't in arrears. They have just now rung me back to confirm that the HMRC will make the change to my SA to remove the liability that they thought I had - I should apparently be able to see the change on my online SA in the next couple of hours.

In a nutshell, whilst the HMRC said in the SA form that they would undertake a reconciliation with SLC for a loan that is due to be paid back in less than 2 years, they hadn't and it took me to ring the SLC to get them to do it. Whilst they may have done it between now and Jan 14 (when the money would have been due), I would rather have it concluded now, so am glad I rung them.

dragondancer_2

Hi

I posted this in the help thread but no one has replied so I am reposting this here.

Hi folks. I hope you give me some advice.

Back in 2008 I went back to uni as a mature student and went directly in the final year. ( I only took one loan ) I graduated and about 4months later got a job.

As it was an Income Contingent Loan I didn't think too much about it and thought the repayments would start automatically I didn't pay too much attention to my pay slips. This month SLC sent me a letter saying I have to contact them as HMRC think I have no job! Which is strange for a couple of reasons, one I am paying ( too much -I know, I know, everything thinks this ) tax every month and I can also see a deduction for my student loan - I just happened to get my new pay slip today.

But looking at my old pay slips this is the first month that it has been deducted! I have been with the same employer all this time, the same address all this time, I haven't run away from this by hiding abroad or lying about my income. This is the first non statement letter I have ever received from them.

Someone, probably HMRC - I have had a lot of problems with them in the past - have ballsed it up and not told SLC. My employer were well aware I had just left uni as it was on my CV, mentioned in my interview and had to give them a copy of my degree certificate!! I filled in correctly every form my company asked me to.

Where do I stand? Are SLC likely to demand "arrears" from me even though its not my fault? Will I just continue to make the payments as normal? Its this first bit that I am really concerned about as if they do it at the wrong time I could be in serious trouble - I am in the middle of selling my flat. Would these "arrears" show up in a credit check ( I have a new mortgage arranged in principle with the bank, if this shows up they may withdraw this )?

Any advice would be grateful.

Poolie

dragondancer wrote: »

Hi

I posted this in the help thread but no one has replied so I am reposting this here.

Hi folks. I hope you give me some advice.

Back in 2008 I went back to uni as a mature student and went directly in the final year. ( I only took one loan ) I graduated and about 4months later got a job.

As it was an Income Contingent Loan I didn't think too much about it and thought the repayments would start automatically I didn't pay too much attention to my pay slips. This month SLC sent me a letter saying I have to contact them as HMRC think I have no job! Which is strange for a couple of reasons, one I am paying ( too much -I know, I know, everything thinks this ) tax every month and I can also see a deduction for my student loan - I just happened to get my new pay slip today.

But looking at my old pay slips this is the first month that it has been deducted! I have been with the same employer all this time, the same address all this time, I haven't run away from this by hiding abroad or lying about my income. This is the first non statement letter I have ever received from them.

Someone, probably HMRC - I have had a lot of problems with them in the past - have ballsed it up and not told SLC. My employer were well aware I had just left uni as it was on my CV, mentioned in my interview and had to give them a copy of my degree certificate!! I filled in correctly every form my company asked me to.

Where do I stand? Are SLC likely to demand "arrears" from me even though its not my fault? Will I just continue to make the payments as normal? Its this first bit that I am really concerned about as if they do it at the wrong time I could be in serious trouble - I am in the middle of selling my flat. Would these "arrears" show up in a credit check ( I have a new mortgage arranged in principle with the bank, if this shows up they may withdraw this )?

Any advice would be grateful.

When you joined your employer did you complete a P46 and state you have a student loan?

Sounds like HMRC have finally managed to match up the tax records on their systems for SLC. SLC will not demand any back payments, but the interest would still have been added to your account when you should have been making repayments.You will be expected to continue to make repayments through your salary till the loan is paid off. Student Loans do not appear on your credit report and your mortgage provider should be ignoring they are on your payslip anyway.

dragondancer_2

Poolie wrote: »

When you joined your employer did you complete a P46 and state you have a student loan?

Sounds like HMRC have finally managed to match up the tax records on their systems for SLC. SLC will not demand any back payments, but the interest would still have been added to your account when you should have been making repayments.You will be expected to continue to make repayments through your salary till the loan is paid off. Student Loans do not appear on your credit report and your mortgage provider should be ignoring they are on your payslip anyway.

Hi

I don't know if I completed a P46 or not. It was 5 years ago and I don't remember. I know I filled in every form they gave me - and there were quite a few!

But, if it is the case that I just start paying it off, then that's ok. I was just worried they would take out all the back payments or list me on a credit search.

dragondancer_2

and this morning I got a letter from slc saying that hmrc now know I have a job and payments will be taken from my salary and credited to my account!

what a shambles of a system!

Poolie

dragondancer wrote: »

and this morning I got a letter from slc saying that hmrc now know I have a job and payments will be taken from my salary and credited to my account!

what a shambles of a system!

HMRC have two systems which must be in sync and your account appears to have fallen in between the gaps. One is the Income Tax system and the other is SLBS (Student Loans Business Services) system.

You could complain to SLC and ask for any interest to be removed from your account between when you started work and were earning over the threshold and when the repayments actually restarted since the error was with HMRC. You would need to provide payslips from when you started work.

radiohead40

Hi everyone

I have a two student loans, one from my undergraduate study (2004-2008) and one from my PGCE study (2008-2009).

I'm now in what I think is a somewhat unusual position - since starting work, I have ended up in a situation whereby I have several different part-time PAYE jobs (currently 3) - this has meant that although I am earning above the threshold for repayment across a year, I have just realised that I hardly ever make any payments through my different weekly/monthly paychecks! ... should I be worried? My contributions last year were less than 15% of the additional interest! To complicate matters further, I have additionally started to undertake some further self-employed work on top of my PAYE work - I'm a bit worried that I will have a huge bill land through my door one day!

On a related note, should I be considering repaying any of my loan voluntarily? I'm also a bit worried that my student loan debt may count against any future mortgage applications I may try to make...

Any advice/thoughts would be greatly appreciated!

Best wishes.

Poolie

radiohead40 wrote: »

Hi everyone

I have a two student loans, one from my undergraduate study (2004-2008) and one from my PGCE study (2008-2009).

I'm now in what I think is a somewhat unusual position - since starting work, I have ended up in a situation whereby I have several different part-time PAYE jobs (currently 3) - this has meant that although I am earning above the threshold for repayment across a year, I have just realised that I hardly ever make any payments through my different weekly/monthly paychecks! ... should I be worried? My contributions last year were less than 15% of the additional interest! To complicate matters further, I have additionally started to undertake some further self-employed work on top of my PAYE work - I'm a bit worried that I will have a huge bill land through my door one day!

On a related note, should I be considering repaying any of my loan voluntarily? I'm also a bit worried that my student loan debt may count against any future mortgage applications I may try to make...

Any advice/thoughts would be greatly appreciated!

Best wishes.

Don't worry about the payments not covering the interest, it is due to all your part time jobs. I would not overpay as you can't get the money back if you need it.

Student Loan does not go against you for a mortgage application.

When you do your self assessment, you will be asked to provide all the details and then HMRC will decide if you are due to pay anything for your Student Loan.

Sponge

Deferment of mortgage-style loans.

I am going to speak to SLC this week, but wondered if anyone here could answer these questions?

According to this webpage:

If you have a Mortgage Style Loan and you have a gross monthly income of £2,398 or less (equivalent to £28,775 per year) you may be eligible to apply for deferment.

This MSE webpage states:

Can I defer payment? Yes, if you earn under £28,775. You need to write to SLC once a year to do so, supplying particular documents - see Student Loans Company for full details.

As does this one:

Mortgage-Style Loans (loans taken out before 1998)

From 1 September 2013 to 31 August 2014, the new interest rate for 'Mortgage Style' loans will be 3.3% as interest is linked solely to RPI. From 1 September 2013, the deferment threshold for mortgage style loans will be £28,775. If you have a gross income of £28,775 per year or less, you may be eligible to apply for deferment.

I've been defering for several years and my annual income is several thousand pounds below the annual threshold. However, sometimes I earn overtime which puts me within a couple of hundred pounds of the monthly threshold. This year, I may be over the threshold for one of the months.

Do they defer based on just monthly income? (As the first quote suggests.) Or will they look at the bigger picture and see that although that month, or maybe even two of them, was over the monthly threshold, I was still well under the annual threshold? (As per the other quotes.)

I've done a lot of overtime and other extras, e.g. Public Holiday working, over the last few months. My salary to date is still well below the annual threshold and will be by the end of the financial year. However, the 3 payslips I submit in my deferal application (around March time iirc) may include a month where I'm over the £2398, by just a few pounds.

I'm worried they will refuse deferal, although I am well under the annual threshold.