Student Loan Interest

timpal

Hi,

Can someone explain if I have this wrong in principle (plan 1).

- HMRC makes deductions from your salary every month.
- HMRC then make a payment to SLC at the end of the tax year.

Although HMRC are 'holding' the money over the course of the year, no interest is paid on it.

In addition no deduction in interest charged on the SL amount on the basis you're making monthly repayments.

So you're being charged interest on money you've already paid back surely?

Or have I got it wrong somewhere?

Ed-1

timpal wrote: »

Hi,

Can someone explain if I have this wrong in principle (plan 1).

- HMRC makes deductions from your salary every month.
- HMRC then make a payment to SLC at the end of the tax year.

Although HMRC are 'holding' the money over the course of the year, no interest is paid on it.

In addition no deduction in interest charged on the SL amount on the basis you're making monthly repayments.

So you're being charged interest on money you've already paid back surely?

Or have I got it wrong somewhere?

Interest is only calculated by SLC when they receive information on what you have repaid. It's then applied as if they received it in equal instalments on the last calendar day of each month during the tax year.