PAYE and Student Loans, where's my money?

shen

Hi, hoping someone can help...


If student loans are deducted as PAYE but not given to the SLC until the end of the financial year (but I continue to pay interest on the capital monthly during the year), who holds those deductions (and profits from them)? I'm not earning interest on the deduction but somebody must be? And I doubt the SLC would retroactively deduct the interest. A hidden form of illegal taxation?


Perhaps someone out there has already answered this, if so apologies, I'm a newbie!


Cheers!

Ed-1

shen wrote: »

Hi, hoping someone can help...


If student loans are deducted as PAYE but not given to the SLC until the end of the financial year (but I continue to pay interest on the capital monthly during the year), who holds those deductions (and profits from them)? I'm not earning interest on the deduction but somebody must be? And I doubt the SLC would retroactively deduct the interest. A hidden form of illegal taxation?


Perhaps someone out there has already answered this, if so apologies, I'm a newbie!


Cheers!

That is indeed what they do. Interest is adjusted when the SLC receive details of repayments from HMRC at the end of the tax year. Repayments are deemed to have been received on the last day of each month throughout the tax year, regardless of when they were actually made. Note that soon real time information (RTI) should be rolled out for student loan repayments so repayments should eventually be deducted in real time - about time SLC moved into the 2010s; they're still living in the 90s!