Inland Revenue Chasing Student Loans

nottheone35 · 16 May 2011 at 1:47PM

Hello,

I was hoping to get some help.

I graduated about 10 years ago and had taken out student loans when I was in uni. I was employed for a year in 2009 but have spent the rest of my time freelance (making very little money!). I have now got a rather lengthy letter from the inland revenue asking to pay over £8k in student loans, right now. They are stating that I should have been paying this off when I was employed and since it wasn't paid they want the whole figure back now.

When I was employed I never really checked my payslip and the I had forgotten about the whole student loans. Am I at fault here? Is this not something that the Inland revenue / accountant should have picked up on? Or is it down to me to declare that I am a student?

Any advice would be very much welcome.

Thank you,

Tixy · 16 May 2011 at 1:54PM

What date did you start Uni? Did you have your first loan after 1 September 1998?
If so then when you started a new job after having been self-employed previously you would have completed a p46 - this has a box that you have to tick regarding student loans if you fit the criteria - if you didn't do this then your employer would not have known or notified HMRC so no deductions would have been taken. So assuming you should have ticked this box and you didn't then the error would have been down to you alone and the revenue have only just picked this up.

For the years you were self-employed and completing a self-assessment tax return then you should have calculated yourself if any student loan repayments were due and sent those to HMRC when your tax return is submitted. If you employed an accountant to help you complete yout tax return did you tell them you had student loans to repay?

CLAPTON · 16 May 2011 at 1:56PM

yes, the Uk system of taxation assumes people and honest and knowledgeable

when you became employed you should have filled in a P46 and ticked the box that said you had a student loan; if you were paid in excess of 1250 per month then you were lieble student loan repayments

nottheone35 · 16 May 2011 at 1:57PM

Thanks Tixy.

Yes, it was after 1998.

I dont remember filling this form out, it was a while back though. Could this have been something my accountant would have filled out for me? (my accountant sorted out all my tax etc while I was freelancing and while I was employed).

Cheers,

Tixy · 16 May 2011 at 1:59PM

The p46 would have been given to you by your employer for you to complete - even if your accountant had completed it for you it would have to have been signed by you as it is your declaration.

nottheone35 · 16 May 2011 at 2:07PM

Tixy wrote: »

The p46 would have been given to you by your employer for you to complete - even if your accountant had completed it for you it would have to have been signed by you as it is your declaration.

Crap!

I must have just glanced over it and just signed it!

I am in no position to pay this all off just now as a lump sum and the IR is being quite harsh (rightly so I guess since it was my mistake). Any idea what the best way to resolve this would be?

Should I talk directly to the student loans company?

Thanks again.

agrinnall · 16 May 2011 at 2:58PM

nottheone35 wrote: »

Crap!

I must have just glanced over it and just signed it!

I am in no position to pay this all off just now as a lump sum and the IR is being quite harsh (rightly so I guess since it was my mistake). Any idea what the best way to resolve this would be?

Should I talk directly to the student loans company?

Thanks again.

But do you really owe £8K? Did you earn over the threshold when you were freelancing and/or when you were employed? I've never had a student loan so I'm not sure on the figures but if I recall correctly that you have to pay 9% that means you would have had to earn around £90K more than the threshold figure over the years.

As a first action I would ring HMRC and ask how they've arrived at the figure, if it doesn't seem right then dispute it. Oh, and before somebody else arrives to say it, there's no such thing as the Inland Revenue any more

.

nottheone35 · 16 May 2011 at 3:03PM

agrinnall wrote: »

But do you really owe £8K? Did you earn over the threshold when you were freelancing and/or when you were employed? I've never had a student loan so I'm not sure on the figures but if I recall correctly that you have to pay 9% that means you would have had to earn around £90K more than the threshold figure over the years.

As a first action I would ring HMRC and ask how they've arrived at the figure, if it doesn't seem right then dispute it. Oh, and before somebody else arrives to say it, there's no such thing as the Inland Revenue any more .

thats roughly the total of my student loan. They are trying to get hold of the entire amount. I was earning £40k for a year and I'm not sure how they arrived at the figure. Wondering if they are just asking for the full amount since I screwed up? I've only spoken to the debt management at HMRC who are saying they cant give me any details apart from the specific amounts that I am due them(not why), which seemed a bit unusual.

ElmerFudd · 16 May 2011 at 3:08PM

I have roughly the same amount to pay, although my course started in 97. I am surprised that you were not sent any forms from the SLC/HLC to defer the payment (I was able to defer for 9 years). Definitely call HMRC.

agrinnall · 16 May 2011 at 3:14PM

nottheone35 wrote: »

thats roughly the total of my student loan. They are trying to get hold of the entire amount. I was earning £40k for a year and I'm not sure how they arrived at the figure. Wondering if they are just asking for the full amount since I screwed up? I've only spoken to the debt management at HMRC who are saying they cant give me any details apart from the specific amounts that I am due them(not why), which seemed a bit unusual.

It does sound like it's possible that they're asking for the lot in one go because they haven't had anything. Whether they can do that I don't know. Hopefully someone with either HMRC or SL knowledge will respond, if you don't get anything definitive I would suggest posting on the Student Money Saving board as a lot of Student Loan questions get asked there.

Taiko · 16 May 2011 at 11:30PM

It is actually written into the contracts that it can be demanded in one go if there is a failure to notify. However, I would suggest just negotiating to pay what is due and what you can for now. SLC/HMRC are usually willing be to lenient.