Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Dural123
    • By Dural123 17th Apr 18, 12:23 PM
    • 10Posts
    • 0Thanks
    Dural123
    Student Loan Repayments for contractors - Non refundable overpayment
    • #1
    • 17th Apr 18, 12:23 PM
    Student Loan Repayments for contractors - Non refundable overpayment 17th Apr 18 at 12:23 PM
    My P60 confirms that I have payed 11.5% of my earning to SLC above the 21k threshold. This should obviously be 9% but as my wage fluctuates on a weekly basis some weeks I get charged more student loan repayment than others.

    I believe the calculation is based on earnings above a certain amount per week are liable for repayment but are these scaled up by 52 weeks to work out averages over the year? As I'm a contractor I don't get payed holiday and don't work 52 weeks of the year (more like 45) so if my weekly wage is multiplied by 52 to work out the 9% (which I think it is) then I'm overpaying every week.

    The SLC will not refund me for this apparent over payment as its worked out on monthly earnings apparently.

    The extreme of this would be if you earned 21K over say 6 months and nothing for the other 6. You would be assumed to have yearly earnings of 42k and make repayments on this amount (so 9% of 21k) even if your yearly earnings were below the minimum threshold.

    This doesn't seem right.
    Last edited by Dural123; 17-04-2018 at 2:50 PM.
Page 1
    • agrinnall
    • By agrinnall 17th Apr 18, 3:02 PM
    • 20,135 Posts
    • 15,855 Thanks
    agrinnall
    • #2
    • 17th Apr 18, 3:02 PM
    • #2
    • 17th Apr 18, 3:02 PM

    This doesn't seem right.
    Originally posted by Dural123
    Perhaps you should be writing to your MP about it then.
    • sheramber
    • By sheramber 17th Apr 18, 6:02 PM
    • 4,682 Posts
    • 3,507 Thanks
    sheramber
    • #3
    • 17th Apr 18, 6:02 PM
    • #3
    • 17th Apr 18, 6:02 PM
    Your student loan repayment is calculated per pay period. If one week/ month your wage is over the limit you pay, if it is less you don't pay. It is not averaged over the year

    http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678490&_dad=portal
    • Dural123
    • By Dural123 17th Apr 18, 6:40 PM
    • 10 Posts
    • 0 Thanks
    Dural123
    • #4
    • 17th Apr 18, 6:40 PM
    • #4
    • 17th Apr 18, 6:40 PM
    My Umbrella company who take the payment calculate it by dividing the allowance by 52 so

    25,000 (new allowance) / 52 = 480/.76. Anything I earn above this in a week is liable to deductions. But the deduction itself is based on my earning in that week so say its 700 gross:

    700 x 52 = 36504 - 25000 = 11,504. x 9% = 1035.36 annually, 19.90pw deducted

    but I do not work 52 weeks and do not get paid for time off or bank holidays.

    700 x 45 (weeks worked) = 31,500 (actual gross salary) - 25000 = 6500 x 9% = 585 annually, 11.25pw

    This example means Im paying 310 a year more than I should be. My overall debt is massive and I will never pay it off so this is money that I will never see again and I have been told I cannot claim it back as an overpayment.

    I can see why this calculation works for PAYE but for contractors its completely inadequate. There are people who work much more varied hours than I do who this must be effecting even worse.
    Last edited by Dural123; 17-04-2018 at 8:28 PM.
    • sheramber
    • By sheramber 18th Apr 18, 1:55 PM
    • 4,682 Posts
    • 3,507 Thanks
    sheramber
    • #5
    • 18th Apr 18, 1:55 PM
    • #5
    • 18th Apr 18, 1:55 PM
    The weekly repayment threshold is set by the Student Loan agreement and is 480 for any weekly pay period.

    If you were only employed for 6 months of the year earning over 480 a week you would make student loan repayments for that 6 months. Although you earned nothing for the next 6 months you would not get any repayment as each weekly pay period is assessed on its own. It is not connected in any way to a period before or after.

    http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678784&_dad=portal&_schema=PORTAL
    • Dural123
    • By Dural123 18th Apr 18, 6:16 PM
    • 10 Posts
    • 0 Thanks
    Dural123
    • #6
    • 18th Apr 18, 6:16 PM
    • #6
    • 18th Apr 18, 6:16 PM
    Your student loan repayment is calculated per pay period. If one week/ month your wage is over the limit you pay, if it is less you don't pay. It is not averaged over the year
    The weekly repayment threshold is set by the Student Loan agreement and is 480 for any weekly pay period.

    If you were only employed for 6 months of the year earning over 480 a week you would make student loan repayments for that 6 months. Although you earned nothing for the next 6 months you would not get any repayment as each weekly pay period is assessed on its own. It is not connected in any way to a period before or after.
    Originally posted by sheramber

    Thanks but this just seems to confirm that the calculation method is inadequate. A contractors weekly pay is not representative of their yearly earnings.

    If I earned 1000 in a week that would not mean my annual salary would be 52k but yet for that week I would be charged student loan repayment as if was on 52k.

    The tax code that I am on works this out and I get repayments in my next paycheque after I have had time off.

    Why can't I just claim back the overpayment once my P60 has confirmed by yearly earnings. I cant believe this issue has not been raised before for people who work on projects and do say 9 months on a 3 months off. (Civil Engineers come to mind)
    • sheramber
    • By sheramber 19th Apr 18, 7:12 PM
    • 4,682 Posts
    • 3,507 Thanks
    sheramber
    • #7
    • 19th Apr 18, 7:12 PM
    • #7
    • 19th Apr 18, 7:12 PM
    Because them's the rules.

    Contact your MP about it if you want to complain about it.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,721Posts Today

7,485Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin