Student Loan Repayment - Precise Mechanics

ok_cub2008

Apologies if this is posted in the wrong section, and further apologies if this is covered elsewhere, but after extensive searching I can't seem to find the detail I need on the mechanics of my student loan repayment.

I have a 1998-2011 student loan, i.e. the current interest rate is 1.5% and I pay back 9% of anything over £16,365.

It is my understanding that annually HMRC pass information to the student loan administrators - then and only then do the administrators of my loan update my outstanding balance. This has yet to occur for 2013, and the balance on my loan has been increasing throughout the year from interest charges. It is however impossible to tell the detail of the charges in my account on the studenloanrepayment.co.uk website, although I'm not here to moan about that (even though it's comical that detail can't be accessed online). I'm sure once my repayments have been allocated to my account I will receive a statement etc.

But my question is, if the repayment information is only received by the student loan administrators annually - do they then retrospectively adjust the interest charges on the account?

My concern is that I'm going to be charged a monthly interest rate (1.5% annual effective rate) on money I've paid to HMRC, but because my balance isn't updated every time I make a monthly PAYE repayment, I will be charged interest on that amount.

A simple example would be... say I made a repayment of £200 through PAYE for payroll month November 2012, but the information of this repayment was not provided to SLC until September 2013. Would I be charged a monthly interest rate on the that £200 between November 2012 and September 2013? My suspicion is that yes, I will be charged. This will be a small amount in the short run, but if this is true then it's just wrong.

Otherwise, do SLC (or whoever) take into account the timing of your repayments when they receive the annual information from HMRC, then recalculate interest charges taking the timing into account?

If this has been discussed previously, please point me in the right direction.

CLAPTON

the way it worked is thus

HMRC only receive details of individuals tax payments
from employers after tax year end i.e. April (basically when P60 info is produced for employees)
HMRC then pass this to SLC who calculate interest and balance etc.

The calculations take into account the fact that payments have been made monthly so you do not overpay interest.

In april 21013 HMRC introduced a new PAYE system which now receives info from employers whenever they pay an individual.
However, I don't know how this use this data with regards to SLC payments

argomatt

I was told the new "real time" reporting of PAYE by the employer to HMRC has no effect on the information passed to the Student Loan Company.

So they still only find out how much you paid at the end of each tax year.