Student loan overseas repayment

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 the tax year, made 4 repayments, but not reached the annual threshold. 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 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?

Luciana005

So glad to see this post! I'm in exactly the same position, worked in the UAE had to pay as otherwise would be in arrears. I worked part of the tax year, then came back to the UK during Covid and was unemployed. Was told on the phone by SLC that as it wasn't declared through HMRC and was paid when working overseas I can't claim back. 
When I asked if this information could be sent to me, they weren't able to and said it was available on gov.uk. But there's no information anywhere! So frustrating as it's a big overpayment and was not done 'voluntarily'! 
Did you get any further with this? 

liamgaul

Luciana005 said:

So glad to see this post! I'm in exactly the same position, worked in the UAE had to pay as otherwise would be in arrears. I worked part of the tax year, then came back to the UK during Covid and was unemployed. Was told on the phone by SLC that as it wasn't declared through HMRC and was paid when working overseas I can't claim back. 
When I asked if this information could be sent to me, they weren't able to and said it was available on gov.uk. But there's no information anywhere! So frustrating as it's a big overpayment and was not done 'voluntarily'! 
Did you get any further with this? 

Nope! I was told this on the phone and then asked SLC via Twitter and they gave me the same reason, so I suspect it is actual policy. I should send an email, just to be triple sure, but I suspect I will hear the same thing back. This doesn't mean they are correct though. Customer service can always be ignorant of the law and unknowingly give false advice. I would really like some clarification by quotation of the legislation that stipulates this. @Ed-1 seems to be very knowledgeable and has quoted the legislation before, so I hope he sees this and can clarify the position of Overseas Loan Repayments regarding the annual threshold.

P.s. For some reason, I can only see your comment privately when clicking on the notification I received. It doesn't appear in the main thread, so no one else will see it either.

silvercar

liamgaul said:

Luciana005 said:

So glad to see this post! I'm in exactly the same position, worked in the UAE had to pay as otherwise would be in arrears. I worked part of the tax year, then came back to the UK during Covid and was unemployed. Was told on the phone by SLC that as it wasn't declared through HMRC and was paid when working overseas I can't claim back. 
When I asked if this information could be sent to me, they weren't able to and said it was available on gov.uk. But there's no information anywhere! So frustrating as it's a big overpayment and was not done 'voluntarily'! 
Did you get any further with this? 

Nope! I was told this on the phone and then asked SLC via Twitter and they gave me the same reason, so I suspect it is actual policy. I should send an email, just to be triple sure, but I suspect I will hear the same thing back. This doesn't mean they are correct though. Customer service can always be ignorant of the law and unknowingly give false advice. I would really like some clarification by quotation of the legislation that stipulates this. @Ed-1 seems to be very knowledgeable and has quoted the legislation before, so I hope he sees this and can clarify the position of Overseas Loan Repayments regarding the annual threshold.

P.s. For some reason, I can only see your comment privately when clicking on the notification I received. It doesn't appear in the main thread, so no one else will see it either.

I can see it. Sometimes you see an old cached version of the threads, refreshing the page should display it properly.

liamgaul

Luciana005 said:

So glad to see this post! I'm in exactly the same position, worked in the UAE had to pay as otherwise would be in arrears. I worked part of the tax year, then came back to the UK during Covid and was unemployed. Was told on the phone by SLC that as it wasn't declared through HMRC and was paid when working overseas I can't claim back. 
When I asked if this information could be sent to me, they weren't able to and said it was available on gov.uk. But there's no information anywhere! So frustrating as it's a big overpayment and was not done 'voluntarily'! 
Did you get any further with this? 

I seem to have found the relevant legislation:

https://www.legislation.gov.uk/uksi/2009/470/regulation/20/made

The problem is there are lots of amendments since that was written almost 15 years ago and they are all published separately. I haven't dug through them all to see if there are any relevant amendments, which there could well be.

The relevant bit seems to be this:

(4) Where the Authority has received a repayment by way of deduction from the borrower’s earnings for a tax year in accordance with Part 4 and those earnings do not exceed £15,000, the Authority must refund the amount deducted if the borrower applies for a refund.

Part 4 refers to 'deductions of repayments by employers' i.e. PAYE deductions; how all salaried UK residents pay. This does not apply to payments by overseas residents, which is laid out in Part 5. I don't see anything mentioning repayments for people who pay in accordance with Part 5. It could be in an amendment, but I doubt it.

Therefore, from my amateur reading, I don't think the legislation covers us, unfortunately. We would need input from someone with more knowledge to be sure though (@Ed-1). Seems an oversight, or at least unfair.