Self -Assessment Student Loan Repayment Calculation

Self -Assessment Student Loan Repayment...

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Hi there,

I have a question regarding the self-assessment tax calculation and was hoping that you can add some clarity for me.

My partner has not so long registered self-employed (she is an IT Contractor) because of when she registered (Oct 2014), HMRC have said she needs to submit an tax return for 13/14. During 13/14 she was working as an employee and was assessed via PAYE and because of this her student loan repayments deducted automatically. Because all of her income was assessable via PAYE – the information inputted to HMRC tax calculation was taken from her P60.

However HMRC tax calculation has said she owes an additional £313.00 for student loan repayments. The amount student loans deducted on her P60 (£1347.00) and previous employers P45 (£958.00) in tax year 13/14 shows that the total amount paid to student loans company (13/14 final revised statement) all matched up (£2305.00).

First we contacted the student loans company and they advised us that the payment (£2305.00) was the correct amount paid but went on to say (and this is what I would like clarification on) that student loan repayments are calculated differently for PAYE and self-assessment – due to the dates? (I assumed that tax year 13/14 is from 06/04/2013 to 5/04 2014 whether you are completing self-assessment or PAYE).

Then I contacted HMRC and they have said to submitted the return (showing the tax due) and the system will automatically correct itself and if it doesn’t to contact them in within 72 hours.

Does this sound correct? I have put some of the numbers below as this might help.

Employment income: £45,454

Less: Personal Allowance: £9,440

Taxable: £36,014

£32,010 @ 20% = £6,402.00

£4,004 @ 40% = 1,601.60

Already paid: = £8,000.00

Total Payable: = £3.60

I appreciate any advice you can give me.

Replies (4)

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Replying to lionofludesch:
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By kingramo81
22nd Jan 2015 13:25

SLC Calculation

Thanks Basil for explaining the SLC calculation - much appreciated.

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By Anne Robinson
22nd Jan 2015 13:38

This problem arises because deductions under PAYE is calculated on a weekly/monthly basis with a threshold whereas SA uses an annual calculation.
Works perfectly if salary is the same each and every month.

Thanks (1)
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By kingramo81
22nd Jan 2015 14:04

Two jobs in one tax year

Thanks Anne.

Does that mean, having two jobs in the same tax year has thrown the calculation out of sync?

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By Anne Robinson
22nd Jan 2015 18:25

Very possibly - however unlike tax it is not a lost cause - HMRC will forward the total SL repayments of £2618 to student loan so the loan is paid off a bit quicker (in this case by £313).

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