Student Loan - how can I avoid paying it back?

byrno

Mozette wrote: »

Tax is deducted on a receipts basis, so you're taxed when you are paid the money, regardless of when it was earned.

Hmmm can anyone confirm this, as i have heard/read different things. There doesn't seem to be any clear guidance from HMRC.

JimmyTheWig

Mozette wrote: »

Tax is deducted on a receipts basis, so you're taxed when you are paid the money, regardless of when it was earned.

In which case, byrno, I suggest you do the following...
1. Work out how much tax you would have paid if you received the money on time (20% of the total, assuming you paid basic rate tax in all the years this money was for and this money wouldn't have taken you into higher rate tax in those years).
2. Work out how much NI you would have paid if you received the money on time (11% of the total, assuming you paid NI months this money was for and this money wouldn't have taken you past the celing in those months).
3. Work out how much tax you will be paying on this money (slightly trickier calculation if it is this money that takes you into the higher rate).
4. Work out how much NI you will be paying on this money (as this is a monthly calculation, it may be easier just to see how much extra NI you paid in the month the money comes in to normal).

Add together the figures in 1 and 2 and the figures in 3 and 4. If the second total is higher than the first total then I believe your previous employer has the moral duty to make up the difference.

Note that I suspect the figure in 3 will be higher than the figure in 1, but the figure in 4 will be lower than the figure in 2. Therefore you might not see much difference!