Student Loan Overpayment

silvercar

Once you go over the threshold, you can’t get a refund. 

I’m not sure if making a pension or charity contribution of £42 would get you under the threshold.

Allan87

I've paid SLC via PAYE on my primary earnings but I've also started a business on the side a couple of years ago. So far the business losses has meant overall my income fell below the threshold and this is reflected in my tax return but SLC are adamant it doesn't count as an overpayment, is this the correct interpretation? 

methecooldude

So I have a tricky one

I starred a university level course in 2011, which is Plan 1, this continued on in to 2012 which is Plan 2, obviously I re-applied for the loan each year.
Since then at employers I've been ticking both Plan 1 and Plan 2 boxes, but do you think I might have been defaulted to Plan 1 and been overpaying?

Ed-1

methecooldude said:

So I have a tricky one

I starred a university level course in 2011, which is Plan 1, this continued on in to 2012 which is Plan 2, obviously I re-applied for the loan each year.
Since then at employers I've been ticking both Plan 1 and Plan 2 boxes, but do you think I might have been defaulted to Plan 1 and been overpaying?

All loans are under Plan 1 if they were relating to a continuing course started prior to 2012. Only the higher fee courses were under Plan 2. But even if you had a combination, it's still the lowest threshold that counts.

Ed-1

Allan87 said:

I've paid SLC via PAYE on my primary earnings but I've also started a business on the side a couple of years ago. So far the business losses has meant overall my income fell below the threshold and this is reflected in my tax return but SLC are adamant it doesn't count as an overpayment, is this the correct interpretation? 

Your income is any NICable earnings + any profits from self-employment. You can't use losses to reduce income and claim back student loan repayments. 

liamgaul

Hi, unique situation that I feel SLC on the phone may have given me the wrong information about.

I have a plan 2 loan from an undergrad degree graduating in 2016. This means I should pay 9% of what I earn over the repayment threshold of approx. £27k a year. I believe this is an annual threshold, not a monthly one, but repayments are taken monthly based on your projected annual income. Is this correct? Therefore, if I were to resign from my job in July and remained unemployed for the rest of the tax year, I would have received only 4 months' salary for that tax year, made 4 repayments, but not reached the annual threshold at the end of the tax year. Therefore would I be due those payments back?

This is almost exactly what happened, except I was living in Denmark and making manual payments from abroad. However, these are not voluntary payments (as I understand it. I am obliged to pay a minimum amount). They are payments determined by SLC in much the same way as in the UK: 9% over a minimum annual threshold, but this threshold is different for each country based on the relative cost of living and converted to GBP based on an exchange rate, all of which is determined and published by SLC for the upcoming tax year. See here for 2023/24: https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2023-24.

Hence SLC requested I update my employment details and I submitted my work contract and payslips to SLC in c. March 2022 and they calculated my repayment amount for the upcoming tax year. They told me my minimum payments were £148 a month and I set up a direct debit (from my UK bank) and paid. I then resigned from my job in July 2022 and moved back to the UK and was unemployed for the rest of the tax year. As the repayment threshold is an annual one, not monthly, and I did not exceed it for the 2022/23 tax year, I believe I am due back these payments, as I would be if I was employed in the UK and making repayments via PAYE.

However, SLC told me on the phone I could not be refunded due to them being overseas payments. At first, I was told I'd never made any repayments whatsoever, so I couldn't be due anything. When I informed them I was working for 18 months in Denmark and made payments from overseas he said that the overseas threshold is a monthly one and not an annual one. I informed him that that is not the case and SLC sets an annual threshold for each country every tax year and publishes it and referred him to the link I posted above. He visited the link and then conceded that it seemed to be an annual threshold. He then said that as my payments were overseas and not paid by PAYE in the English tax system I wouldn't be refunded while acknowledging that I had overpaid. He seemed to hint they were essentially voluntary payments. That is not the case though. SLC requested employment details from me and informed me I owed a specific amount. This is calculated much in the same way as UK residents but just with a different threshold relative to the cost of living. Just because I paid these manually and not by PAYE that doesn't make them voluntary. If I didn't pay, I would be in arrears. 

At each step, he seemed to confidently state a reason I wasn't due a refund and then come up with a different reason when I showed it to be incorrect. He told me about the overseas monthly threshold without even being aware of the published annual threshold that's different to the UK one. It sounds like he was just making stuff up. 

From what he told me (assuming he is right), I suspect that if I hadn't made the repayments as SLC had asked, I'd have gone into arrears, but then I may have been able to get that arrears balance cleared when I showed I was no longer employed and not earning enough to reach the threshold. But because I didn't foresee resigning from my job, it's tough luck because I made the payments as requested of me. Doesn't seem right. Can anyone shed light on this, please?

liamgaul

liamgaul said:

Hi, unique situation that I feel SLC on the phone may have given me the wrong information about.

I have a plan 2 loan from an undergrad degree graduating in 2016. This means I should pay 9% of what I earn over the repayment threshold of approx. £27k a year. I believe this is an annual threshold, not a monthly one, but repayments are taken monthly based on your projected annual income. Is this correct? Therefore, if I were to resign from my job in July and remained unemployed for the rest of the tax year, I would have received only 4 months' salary for that tax year, made 4 repayments, but not reached the annual threshold at the end of the tax year. Therefore would I be due those payments back?

This is almost exactly what happened, except I was living in Denmark and making manual payments from abroad. However, these are not voluntary payments (as I understand it. I am obliged to pay a minimum amount). They are payments determined by SLC in much the same way as in the UK: 9% over a minimum annual threshold, but this threshold is different for each country based on the relative cost of living and converted to GBP based on an exchange rate, all of which is determined and published by SLC for the upcoming tax year. See here for 2023/24: https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2023-24.

Hence SLC requested I update my employment details and I submitted my work contract and payslips to SLC in c. March 2022 and they calculated my repayment amount for the upcoming tax year. They told me my minimum payments were £148 a month and I set up a direct debit (from my UK bank) and paid. I then resigned from my job in July 2022 and moved back to the UK and was unemployed for the rest of the tax year. As the repayment threshold is an annual one, not monthly, and I did not exceed it for the 2022/23 tax year, I believe I am due back these payments, as I would be if I was employed in the UK and making repayments via PAYE.

However, SLC told me on the phone I could not be refunded due to them being overseas payments. At first, I was told I'd never made any repayments whatsoever, so I couldn't be due anything. When I informed them I was working for 18 months in Denmark and made payments from overseas he said that the overseas threshold is a monthly one and not an annual one. I informed him that that is not the case and SLC sets an annual threshold for each country every tax year and publishes it and referred him to the link I posted above. He visited the link and then conceded that it seemed to be an annual threshold. He then said that as my payments were overseas and not paid by PAYE in the English tax system I wouldn't be refunded while acknowledging that I had overpaid. He seemed to hint they were essentially voluntary payments. That is not the case though. SLC requested employment details from me and informed me I owed a specific amount. This is calculated much in the same way as UK residents but just with a different threshold relative to the cost of living. Just because I paid these manually and not by PAYE that doesn't make them voluntary. If I didn't pay, I would be in arrears. 

At each step, he seemed to confidently state a reason I wasn't due a refund and then come up with a different reason when I showed it to be incorrect. He told me about the overseas monthly threshold without even being aware of the published annual threshold that's different to the UK one. It sounds like he was just making stuff up. 

From what he told me (assuming he is right), I suspect that if I hadn't made the repayments as SLC had asked, I'd have gone into arrears, but then I may have been able to get that arrears balance cleared when I showed I was no longer employed and not earning enough to reach the threshold. But because I didn't foresee resigning from my job, it's tough luck because I made the payments as requested of me. Doesn't seem right. Can anyone shed light on this, please?

@Ed-1 I see you are very knowledgeable here. Do you know where the legislation states that refunds are only due to those who repay loans via HMRC? Or where it states that those overseas who don't reach the annual threshold still have to make monthly repayments while working and can't be refunded?

Ed-1

liamgaul said:

liamgaul said:

Hi, unique situation that I feel SLC on the phone may have given me the wrong information about.

I have a plan 2 loan from an undergrad degree graduating in 2016. This means I should pay 9% of what I earn over the repayment threshold of approx. £27k a year. I believe this is an annual threshold, not a monthly one, but repayments are taken monthly based on your projected annual income. Is this correct? Therefore, if I were to resign from my job in July and remained unemployed for the rest of the tax year, I would have received only 4 months' salary for that tax year, made 4 repayments, but not reached the annual threshold at the end of the tax year. Therefore would I be due those payments back?

This is almost exactly what happened, except I was living in Denmark and making manual payments from abroad. However, these are not voluntary payments (as I understand it. I am obliged to pay a minimum amount). They are payments determined by SLC in much the same way as in the UK: 9% over a minimum annual threshold, but this threshold is different for each country based on the relative cost of living and converted to GBP based on an exchange rate, all of which is determined and published by SLC for the upcoming tax year. See here for 2023/24: https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2023-24.

Hence SLC requested I update my employment details and I submitted my work contract and payslips to SLC in c. March 2022 and they calculated my repayment amount for the upcoming tax year. They told me my minimum payments were £148 a month and I set up a direct debit (from my UK bank) and paid. I then resigned from my job in July 2022 and moved back to the UK and was unemployed for the rest of the tax year. As the repayment threshold is an annual one, not monthly, and I did not exceed it for the 2022/23 tax year, I believe I am due back these payments, as I would be if I was employed in the UK and making repayments via PAYE.

However, SLC told me on the phone I could not be refunded due to them being overseas payments. At first, I was told I'd never made any repayments whatsoever, so I couldn't be due anything. When I informed them I was working for 18 months in Denmark and made payments from overseas he said that the overseas threshold is a monthly one and not an annual one. I informed him that that is not the case and SLC sets an annual threshold for each country every tax year and publishes it and referred him to the link I posted above. He visited the link and then conceded that it seemed to be an annual threshold. He then said that as my payments were overseas and not paid by PAYE in the English tax system I wouldn't be refunded while acknowledging that I had overpaid. He seemed to hint they were essentially voluntary payments. That is not the case though. SLC requested employment details from me and informed me I owed a specific amount. This is calculated much in the same way as UK residents but just with a different threshold relative to the cost of living. Just because I paid these manually and not by PAYE that doesn't make them voluntary. If I didn't pay, I would be in arrears. 

At each step, he seemed to confidently state a reason I wasn't due a refund and then come up with a different reason when I showed it to be incorrect. He told me about the overseas monthly threshold without even being aware of the published annual threshold that's different to the UK one. It sounds like he was just making stuff up. 

From what he told me (assuming he is right), I suspect that if I hadn't made the repayments as SLC had asked, I'd have gone into arrears, but then I may have been able to get that arrears balance cleared when I showed I was no longer employed and not earning enough to reach the threshold. But because I didn't foresee resigning from my job, it's tough luck because I made the payments as requested of me. Doesn't seem right. Can anyone shed light on this, please?

@Ed-1 I see you are very knowledgeable here. Do you know where the legislation states that refunds are only due to those who repay loans via HMRC? Or where it states that those overseas who don't reach the annual threshold still have to make monthly repayments while working and can't be refunded?

Overseas repayments are subject to a separate part of the regulations to UK employed.

The original regulations in full are below although they've been amended several times since:
https://www.legislation.gov.uk/uksi/2009/470/contents/made

Overseas repayment is dealt with in Part 5. Part 4 is UK earnings through HMRC and Part 3 is UK earnings through self-assessment.

Note that regulation 20 which deals with refunds makes no provision for refunds of repayments that have been made under Part 5.

You may find this document useful in getting your head around the regulations.

liamgaul

Ed-1 said:

liamgaul said:

liamgaul said:

Hi, unique situation that I feel SLC on the phone may have given me the wrong information about.

I have a plan 2 loan from an undergrad degree graduating in 2016. This means I should pay 9% of what I earn over the repayment threshold of approx. £27k a year. I believe this is an annual threshold, not a monthly one, but repayments are taken monthly based on your projected annual income. Is this correct? Therefore, if I were to resign from my job in July and remained unemployed for the rest of the tax year, I would have received only 4 months' salary for that tax year, made 4 repayments, but not reached the annual threshold at the end of the tax year. Therefore would I be due those payments back?

This is almost exactly what happened, except I was living in Denmark and making manual payments from abroad. However, these are not voluntary payments (as I understand it. I am obliged to pay a minimum amount). They are payments determined by SLC in much the same way as in the UK: 9% over a minimum annual threshold, but this threshold is different for each country based on the relative cost of living and converted to GBP based on an exchange rate, all of which is determined and published by SLC for the upcoming tax year. See here for 2023/24: https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2023-24.

Hence SLC requested I update my employment details and I submitted my work contract and payslips to SLC in c. March 2022 and they calculated my repayment amount for the upcoming tax year. They told me my minimum payments were £148 a month and I set up a direct debit (from my UK bank) and paid. I then resigned from my job in July 2022 and moved back to the UK and was unemployed for the rest of the tax year. As the repayment threshold is an annual one, not monthly, and I did not exceed it for the 2022/23 tax year, I believe I am due back these payments, as I would be if I was employed in the UK and making repayments via PAYE.

However, SLC told me on the phone I could not be refunded due to them being overseas payments. At first, I was told I'd never made any repayments whatsoever, so I couldn't be due anything. When I informed them I was working for 18 months in Denmark and made payments from overseas he said that the overseas threshold is a monthly one and not an annual one. I informed him that that is not the case and SLC sets an annual threshold for each country every tax year and publishes it and referred him to the link I posted above. He visited the link and then conceded that it seemed to be an annual threshold. He then said that as my payments were overseas and not paid by PAYE in the English tax system I wouldn't be refunded while acknowledging that I had overpaid. He seemed to hint they were essentially voluntary payments. That is not the case though. SLC requested employment details from me and informed me I owed a specific amount. This is calculated much in the same way as UK residents but just with a different threshold relative to the cost of living. Just because I paid these manually and not by PAYE that doesn't make them voluntary. If I didn't pay, I would be in arrears. 

At each step, he seemed to confidently state a reason I wasn't due a refund and then come up with a different reason when I showed it to be incorrect. He told me about the overseas monthly threshold without even being aware of the published annual threshold that's different to the UK one. It sounds like he was just making stuff up. 

From what he told me (assuming he is right), I suspect that if I hadn't made the repayments as SLC had asked, I'd have gone into arrears, but then I may have been able to get that arrears balance cleared when I showed I was no longer employed and not earning enough to reach the threshold. But because I didn't foresee resigning from my job, it's tough luck because I made the payments as requested of me. Doesn't seem right. Can anyone shed light on this, please?

@Ed-1 I see you are very knowledgeable here. Do you know where the legislation states that refunds are only due to those who repay loans via HMRC? Or where it states that those overseas who don't reach the annual threshold still have to make monthly repayments while working and can't be refunded?

Overseas repayments are subject to a separate part of the regulations to UK employed.

The original regulations in full are below although they've been amended several times since:
https://www.legislation.gov.uk/uksi/2009/470/contents/made

Overseas repayment is dealt with in Part 5. Part 4 is UK earnings through HMRC and Part 3 is UK earnings through self-assessment.

Note that regulation 20 which deals with refunds makes no provision for refunds of repayments that have been made under Part 5.

You may find this document useful in getting your head around the regulations.

Thank you very much. I had just found that document and realised it doesn't outline any case for refunds for overseas repayments. For some reason, there seems to be a separate thread with just my post that somebody else replied to and I posted my response there.

poshpaws_007

Hi, I calculated all my P60's and was expecting around £1,500 in overpayments by when I submitted my refund form, I received £127.00 back, I know I have never earned above the threshold for many years until now, when I am just about earning over. Can I appeal against this as I spent many hours checking through old payslips and P60's?