RANT: Student loan deductions paid 19% over 15K threshold - no refund

Impet_Limpet

Just been going back through my P60s from the last 4 years. I earned less than 15k in my 2008, 2009, and 2010 years for which I am due a refund of £64

However this years P60 I earned £15990 yet paid £184, when according to the link below, I should have paid no more than £84 so I paid more than double than if I would have if my wages were split evenly over the year.

http://www.student-support-saas.gov.uk/student_support/repay_loan.htm

When I queried this I was told that I couldn't have a refund as I was over the threshold even though it worked out I had paid 19% of my income over £15000 in the tax year 2010-2011 apparently that irrelevant

I'm a little disappointed (I'm in a financial squeeze and the refund would help), and you always see the loan companies/universities/government implying you "only pay 9% over the threshold - it's not that expensive." but don't mention anything in the T & C about not getting refunds if you overpaid the 9% proportion.

AARRGGHH!

Any advice or is this just an accepted fact that I've only just learned?

Many thanks!

MrsManda

Impet_Limpet wrote: »

However this years P60 I earned £15990 yet paid £184, when according to the link below, I should have paid no more than £84 so I paid more than double than if I would have if my wages were split evenly over the year.

http://www.student-support-saas.gov.uk/student_support/repay_loan.htm

When I queried this I was told that I couldn't have a refund as I was over the threshold even though it worked out I had paid 19% of my income over £15000 in the tax year 2010-2011 apparently that irrelevant

You pay 9% of everything you earn over £15,000 however the £15,000 is split over the year depending on how you are paid. If you are paid monthly then you pay 9% of everything you earn over £1250 each month. Presumably the reason you've paid so much is because your income is not split evenly. Because you earned over £15,000 over the year you are not entitled to a refund.
I'm sure it's in the T&Cs though I don't have a copy on me so cannot check but it is included on the repayment website
http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3867311&_dad=portal&_schema=PORTAL

regprentice

The problem here is that student loan deductions are not calculated on the basis of your cumulative pay.

i.e. if you received a large payment early on in the year (say a bonus) then your tax would be quite high in that month but would automatically adjust itself throughout the year so that at the end of the year your tax payment was correct. Student loans are calculated only on the basis of your wage in your pay period, and if you go on to earn less then there is no subsequent correcting adjustment in the way that there is for Tax.

You can apply for a refund at the end of the year if you feel its worth it.

http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansCoursesStartingFrom1998/DG_10034868

Impet_Limpet

Thanks regprentice, though that was my issue I DID ask for the refund for the 2010/11 year, for the £100 extra I paid but it was refused because I earned over £15k over the whole year.

Thanks MrsManda, the change in income over the year is the cause of the issue and will be in future years. (I assume the same will happen when I eventually go on Maternity leave too).

I can see the part about if you income changes over the year the repayments are adjusted to reflect this. Shame they don't adjust in the similar way to PAYE tax so the figures are closer to 9%. I can also see how it is implied on the website (based on monthly/weekly threshold earning instead of annual gross income), shame it's not more explicit in the T&C I have (2002) like it is here (wish I'd seen the income of PAYE varies section before calling)

http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansCoursesStartingFrom1998/DG_10034867

Ah well no worries!