Student Loan and Self Assessment

marklar1980

Hello - hoping someone can kindly help. I'll try to summarise:

My wife has registered Self Employed as she sells part-time on Etsy. We are finalising her self-assessment for Tax Year 2014-2015. As a sole trader she made a loss of £184 on a turnover of£654. The complication has arisen from payments to her student loan.

On advice from the Student Loans Company she repays Direct Debit. However, the return does not ask for SL repayments made via this method - only via employer. Therefore the calculation throws up a balance owing for this amount £1024. Is there a way to deal with this?

Additionally, her payments taken by the SLC amount to £563.88. For reasons unknown the SLC credited some monies at the start of the year. Therefore this also falls short of the £1024 theoretically owed.

Hope someone can shed some light on this! We'd hugely appreciate it.
Mark

jimmo

Page 4, then page 2.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/422882/CSL1.pdf

marklar1980

Thanks Jimmo. It's still not clear as there's no direction when you've switched to direct debit payments to the SLC.

Has anyone had any experience of this situation.

jimmo

That form seems very unlikely to qualify for a Plain English but at the bottom of page 4 it says
[FONT=PVZYI O+ IR Modena][FONT=PVZYI O+ IR Modena][/FONT][/FONT][FONT=PVZYI O+ IR Modena][FONT=PVZYI O+ IR Modena]In the last 23 months of repayment, if you repay through PAYE or a combination of PAYE and Self Assessment you can ask to go on to a Direct Debit repayment arrangement. This means that you won’t overrepay your Student Loan. In anticipation of this the SLC aims to contact suitable borrowers to offer to arrange this option [/FONT][/FONT]
On page 2 it says
[FONT=PVZYI O+ IR Modena][FONT=PVZYI O+ IR Modena]Box 3 states “If you think your loan may be fully repaid within the next two years, put
‘X’ in the box.”
[/FONT][/FONT] As your wife is paying by DD she must think that the loan will be fully repaid within the next 2 years.

marklar1980

Cheers Jimmo. That's the case yes, it's just that there's no option to include Direct Debit payments as part of the self assessment and these are also lower than she should have theoretically paid as the SLC advised to set the DD at £60 per month.

I think a call to HMRC is the only resolution. Barring the issue with paying via direct debit the payments fall short by £450 which we most definitely wasn't expecting to have to pay.

beefturnmail

I had a similar problem with my wife's SA when she had completed paying her Student Loan repayment. The way I approached it was to ask (in writing) for a portion of the the student loan repayment due via SA to be informally stood over - see here: http://www.hmrc.gov.uk/manuals/sammanual/sam11130.htm.

HMRC then didn't take the action they were supposed to do according to the guidance SAM11131 (or any action at all, as far as I can tell), so I complained (following this guidance exactly https://www.gov.uk/guidance/complain-to-hm-revenue-and-customs) and this solved it, plus me/my wife received £100 compensation

marklar1980

Thanks so much for the replies. In case anyone else is in the situation of paying student loan payments via direct debit and stumbles upon this thread here is the deal:

1. Call HMRC, you will need to speak to the specific team that deal with Student Loan Collections.
2. They will check and, if you're in the situation above, the SLC should have told HMRC to cease collecting payments.
3. Therefore, HMRC will advise you to completely remove the Student Loans section and thus negate the issue of payments being required.

All the best!