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Student Loan - how can I avoid paying it back?
Comments
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Am more than happy to pay my share through fair taxation.I think that would be a great idea, as long as you want to pay it for them Jimmy.
Equally, I'm more than happy for the government to scrap various unnecessary things (e.g. replacement of Trident system) from their budget to pay for it.0 -
I had this problem, I had a backpay, not 20k but 3 months a new job hadn't paid me and the SLC worked out that was 1/12 of my annual income and charged me a fortune accordingly, but unlike tax where it is worked out at next paycheck over your tax code it is a loan payment and cannot be reclaimed. I reckon the best route would be to phone SLC before-hand and try to make some arrangement with them, otherwise if it comes through with wages then they assume that's your regular and take a chunk.
Matt.
Matt.
if its a post 1998 loan then the SLC work out nothing... it's done by your company's payroll on the basis of 9% on monthly earning over 1250
assuming you earned more than 1250 pm basic then you didn't lose out at all by having back pay received all in one month.0 -
Just re-read this and seen the following...I am soon due to receive a large amount of backpay from a previous job (about £20k) ... this is money I earned over a period of about 5 years
Was this your only income over 5 years? Was it fairly regular from month to month? If so, you shouldn't be paying any of it back to the SLC. In which case, I guess the best move is to contact the SLC and tell them about it now.
Also, something I'd be more bothered about if I were you is the tax position. You see, if you end up giving 9% of this money to the SLC, all of that money will come off what you owe them and so won't be such a bad thing.
But if you'd earned this money (and no other money) regularly over 5 years you wouldn't have paid income tax and NI on it. If you have to pay this now as though you'd earned it this year then that is really unfair. Because unlike an SLC repayment, this is of no benefit to you. Depending on how much you now earn, this may even take you into the higher rate tax bracket!
(Another part of me questions why you continued to work for this company for 5 years without being paid?!)0 -
Really?
On a slightly different topic, what would the SLC do if the person received a large sum of money? (e.g £25,000).
As far as I know, only your income is used for assessment. Legally anyway.
If it was paid via a salary, then he would lose a lot of it as he would theoretically, for that month, be earning over £240,000 pa. If it was was received any other way, the SLC wouldn't be able to touch it.0 -
If it was paid via a salary, then he would lose a lot of it as he would theoretically, for that month, be earning over £240,000 pa. If it was was received any other way, the SLC wouldn't be able to touch it.
if the money was a gift then it's outside the tax, NI or SL system
if it was earned income then it would be subject to tax, NI and SL deduction whether or not deducted at source0 -
The student loan is and was always a typical labour thug move to keep people in debt! That's all it was ever about! It's all anything this labour government ever did!
Oddly, THEY all got their higher education for free. Nice time to pull the ladder up!
I agree. Which is why my overdraft limit was crushed by me from £1250 down to £100 after uni. Along with saving all my pennies (my quote target).
Uni fees will get worse. So glad I will not face such a fate.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
Jimmy
No this figure is approx was how much I was underpaid over 5 years (my first job out of uni btw) but due to local pay and grading agreement and my employer (a local authority) not reviewing our job description when it should have done and then not informing us of this until about 4 years later. They have only just decided that they should probably pay us this money now after a 3 year battle - nothing to do with it being an election year am sure!
Thanks for all your info and thoughts on this guys.
I would just like to reiterate, that I am not trying to get out of paying my SL back, and I knew what I was getting myself into by taking out a student loan - otherwise I would not have been able to go to uni - I was simply exploring the options that when I recieve my backpay was it possible to defer paying a massive amount back now and just continue to pay back as I have been from my monthly earnings.
On reflection I am not really any clearer, but expect that I will end up paying back a large amount to the SLC now, as I would have done if I received the money when i worked for it. This may not be a bad thing though as it will probably clear the debt, it just would have been nice to be able to do something a bit more worthwhile with it, perhaps a deposit for a house or something...0 -
Were you paying anything off your student loan at the time?No this figure is approx was how much I was underpaid over 5 years
If so, had you been paid this money at the time, 9% of it would have gone against your student loan. Which is exactly the same amount that you will be paying now.
So I doubt (rightly so, imo) that you can do anything about it.
I understand that it would be nice to have this lump sum now, but remember that this is paying off a debt and will bring you closer to the time when you don't have to pay anything towards your loan.
I presume that at the time you were paying basic rate income tax. Do you mind telling us how much you earn a year now? My concern is if this is treated as income in the month and year it is paid then you may well end up paying more income tax on it than you would have done if it was paid at the right time.
But, equally, you may well end up paying considerably less NI on it, so you may be better off!
If it does work out that you are worse off I don't know if there is anything HMRC can do about it. If not, I don't know if you can go back to your employer and tell them the situation and ask for a bit more in back-pay so that you end up in the situation you should have been in.0 -
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Jimmy, this is another area of concern, that it may be considered as this years earnings which would put me well over the 40% tax bracket. From the research I (and my former colleagues) have done, we aren't much clearer, however as I earned this money from 2003-2008 I should be paying the tax rates for the relevant year you would think. You never know how the tax office works though, and after speaking to them they didn't seem to have a clue.
I will have to wait and see how it all works out. I am just glad to be finally getting this money, and as you say I should be paying my SL back on these earnings from previous years as I would have done at the time, I was just exploring if there was a legal loophole. I started uni in 1998 (the first year that fees came in and grants stopped :mad:) but I haven't always paid 9% - it was about half that between 2005-6 I think.0
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