Student loan overpayment and over the threshold

Locationsgirlie123

Hello,

looking for some advice or trying to find anyone who has been in a similar position.

Following Martin Lewis’ advice I managed to get a refund for a few of my tax years where I was under the annual threshold. However I am having issues for two of the years where I was over the threshold but they still took too much.

During these years I worked freelance in the film/tv world so I changed jobs frequently and had waivering income across the year. One of the tax years they have taken 26% over the threshold instead of the 9% they should’ve taken. Surely this can’t be right? Am I entitled to a refund for this? It wasn’t due to being on the wrong plan but rather HMRC/student loan company assuming I’d be earning more than I did. 

I’ve spoken to them on the phone and they are saying they’ve done it correctly because I was paid weekly and they took 9% on the weeks I was over. But looking at the year as a whole they have definitely taken too much! What do I do?  

saajan_12

They're actually right - the threshold is based on your income frequency, doesn't always have to be a year. So if some weeks you were paid more and other weeks less, then you'd repay student loans on the weeks over and not get a refund on the weeks you're under threshold. There's a special exemption if over a year you earn less than the annual threshold, but that doesn't extend to all payments being recalculated over a year. 

I get your perspective, but think of it similar to National Insurance which is also assessed every pay day, plus an gift in the form of a refund in certain circumstances only. 

https://www.gov.uk/repaying-your-student-loan/what-you-pay

silvercar

I agree with @saajan_12, those are the rules. Rn over the threshold in any pay period and you pay the 9% on anything over the threshold. If you can’t equalise your earnings more, then I’m afraid you are stuck.

one option would be to freelance through your own company, and pay yourself a wage through the company. This would give you more control but comes with costs and the need to administer a payroll for yourself, so probably not very efficient 

la531983

But hey, least you will get the loan paid off quicker. Every cloud...

Ed-1

Locationsgirlie123 said:

Hello,

looking for some advice or trying to find anyone who has been in a similar position.

Following Martin Lewis’ advice I managed to get a refund for a few of my tax years where I was under the annual threshold. However I am having issues for two of the years where I was over the threshold but they still took too much.

During these years I worked freelance in the film/tv world so I changed jobs frequently and had waivering income across the year. One of the tax years they have taken 26% over the threshold instead of the 9% they should’ve taken. Surely this can’t be right? Am I entitled to a refund for this? It wasn’t due to being on the wrong plan but rather HMRC/student loan company assuming I’d be earning more than I did. 

I’ve spoken to them on the phone and they are saying they’ve done it correctly because I was paid weekly and they took 9% on the weeks I was over. But looking at the year as a whole they have definitely taken too much! What do I do?  

As above - the threshold for student loans and National Insurance is per pay period, unlike income tax which is cumulative and annual.

Income tax is reassessed at the end of the tax year. Student loans and National Insurance aren't.