MSE News: 40,000 urged to reclaim £22m in student loan overpayments

Poolie

The problem is how the tax system works and the once only annual reporting to SLC by your employer care of HMRC

dodgie

Hi all,

I've had a long on and off relationship with the SLC, it took them years to finally get in touch with my employer to start taking payment through my payroll in my first job after uni, and then again in my second job. I always assumed that it would be years until I paid it off and in my stupidity never really thought to check in subsequent jobs when I just saw the contributions being taken on my payslip every month.

Decided to phone up this morning as I was digging through my paperwork and realised that I hadn't had a statement since moving to my new house four years ago. While on the phone I asked for a balance only to be put on hold for ten minutes while he spoke to a grown-up before coming back and informing me that I had overpaid by £2,676 back in April 2010!

I've just checked my payslips since then and there's almost the same again in payments made SINCE!

They're bunging a cheque in the post for the £2,676 (as I no longer have the account they have on record for me) but I had to give them my Payroll Number and PAYE Reference number to get them to tell HMRC to instruct my employer to stop taking contributions. They said this would more than likely stop by February as we're too late for January payroll.

With a baby on the way (3rd May) and about 5K owing on a credit card (0% tarted thanks to the sound advice on MSE!) this is great news and totally out of the blue.

I must admit I didn't even think about interest until I read this article, so didn't ask on the phone. Would the SLC have already factored in interest in the £2,676 balance they quoted or should I go back and ask for that?

I have to send in copies of my payslips with a covering letter to get the overpayment since April 2010 so I will be asking for interest on that too.

How is the interest calculated? Was it a 1.5% flat rate throughout the term or has this varied over the years as I think I may have been overpaying for quite some time.

Any help would be most appreciated.

Rich

Poolie

dodgie wrote: »

Hi all,

I've had a long on and off relationship with the SLC, it took them years to finally get in touch with my employer to start taking payment through my payroll in my first job after uni, and then again in my second job. I always assumed that it would be years until I paid it off and in my stupidity never really thought to check in subsequent jobs when I just saw the contributions being taken on my payslip every month.

Decided to phone up this morning as I was digging through my paperwork and realised that I hadn't had a statement since moving to my new house four years ago. While on the phone I asked for a balance only to be put on hold for ten minutes while he spoke to a grown-up before coming back and informing me that I had overpaid by £2,676 back in April 2010!

I've just checked my payslips since then and there's almost the same again in payments made SINCE!

They're bunging a cheque in the post for the £2,676 (as I no longer have the account they have on record for me) but I had to give them my Payroll Number and PAYE Reference number to get them to tell HMRC to instruct my employer to stop taking contributions. They said this would more than likely stop by February as we're too late for January payroll.

With a baby on the way (3rd May) and about 5K owing on a credit card (0% tarted thanks to the sound advice on MSE!) this is great news and totally out of the blue.

I must admit I didn't even think about interest until I read this article, so didn't ask on the phone. Would the SLC have already factored in interest in the £2,676 balance they quoted or should I go back and ask for that?

I have to send in copies of my payslips with a covering letter to get the overpayment since April 2010 so I will be asking for interest on that too.

How is the interest calculated? Was it a 1.5% flat rate throughout the term or has this varied over the years as I think I may have been overpaying for quite some time.

Any help would be most appreciated.

Rich

Hi Rich,

Payments not being taken can be an issue due to P46 not being marked or it being marked on a P45 as well as internal problems with HMRC.

The overpayment from April 2010 will be due to the way the tax system works and the length of time between your employer informing HMRC and this information being past to SLC and SLC then asking HMRC to advise the employer to stop taking the deductions.

They should have been able to setup new bank details on the system to save arranging a cheque as that can take a bit longer to organise. In your covering letter make sure you include your bank details as they can pay the money back via BACS within 3 to 5 days which is a lot faster than waiting for a cheque.

SLC will have included the interest you were entitled too in the overpayment. From April 2010 the interest rate has been a constant 1.5% so you will be entitled to that rate on any overpayment.

mia27

I have been paying just under £200 a month, and have currently overpaid by around £1200. I was sent the letter to switch to Direct Debit to prevent overpayment, but was told as they don't know how much my deductions were from my salary until the end of the tax year were, if I cancelled my Direct Debit once I had paid off the loan, they would reinstate taking £200 from my salary each month. Anyone know if the advice I was given was correct? I did query it, but they told me it was there policy and there was nothing I could do.

Poolie

The DD would be put in place instead of taking deductions from your salary. You do need to provide up to date salary information for it to be calculated.

If the DD is cancelled before the repayments are complete then they would automatically reinstate the deductions from your salary till complete which could mean you end up with an overpayment.

Linzi&Ben

Recently I have found out I have made overpayments of about £900 to the SLC. This morning my partner made comment that I would pay tax on this refund as it would mean that I had under paid tax for the last year.

Is he correct? This did not cross my mind and I cannot find a definative answer anywhere on line.

Thanks
Lindsey

atypical

Linzi&Ben wrote: »

Recently I have found out I have made overpayments of about £900 to the SLC. This morning my partner made comment that I would pay tax on this refund as it would mean that I had under paid tax for the last year.

Any tax due on the £900 should already have been paid. Student loan repayments are taken from post-tax salary.

fulhamnonny

Hi,

I've got a couple issues with the SLC, for over a year I've been chasing the SLC and HMRC about a student loan payment that was not paid to the account from the 09/10 tax year. I think as I've just received a statement with it on that it's finally been paid, but it seems (I currently can't find a pervious statement) that the interest has not been recalculated.

Also this is more on the topic of this thread, I believe I have now over paid on my student loan. I have contacted the SLC, but they kept saying I could not pay by direct Debit as the 09/10 tax year had not been paid.
Admittedly it was only at the end of the11/12 tax year through a bonus at my job that I've managed to pay off my balance.

They asked me to provide my payslips for the whole of the previous tax year for them to issue a stop notic, but as I was temping for a few months and I got paid weekly, I can't find them all. My P60 only shows how much student loan I've paid in my job since I stopped temping. Any ideas on how to get this resolved sooner rather than later, as I don't fancy waiting another few months until HMRC pays the 11/12 year and with some of you mentioning it could take months to get the money back I really don't want them holding on to the money/ taking it from my wages longer than necessary.

Thanks