Student Loan on maternity

Student Loan on maternity

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Medical doctor has 3 regular sources of employment. During the 11-12 tax year she went on maternity and received part full pay and part maternity from all.

As a result of the maternity pay the student loan deductions for the year were less than normal. However, as she is in self-assessment when I come to complete the tax return there is a significant additional student loan liability.

Can this really be right as I thought the whole idea was reduced income due to SMP but now a liability?

This seems unfair in the sense that if a similar personal was not in the SA system then this additional liability would not be paid?

Thanks

Replies (6)

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By Ann Lovatt
28th Jan 2013 10:33

other income?

if she is in the SA system and additional student loan has been calculated, I can only assume she must have other self-employed earnings?

If this is the case then yes it will be due as anyone fully self-employed would have to pay.

If not & all her earnings have already gone through the same employer on PAYE basis, then there must be a calculation error in either salary system or your ITR software?

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By SE
28th Jan 2013 10:49

Student Loan

Thanks Ann

Client gets say £800pm maternity from each of the 3 employers so below the SL limit as far as each employer is concerned so does not pay any SL.

However this makes £2,400pm gross for tax return purposes so a SL shortfall.

There is no self-employed income.

 

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By Euan MacLennan
28th Jan 2013 14:18

Seems fair enough

She is being paid £2,400 a month, but has not repaid any student loan due to the threshold for each separate employer, so her tax return throws up an amount of loan to be repaid.  Presumably, it is less than it would have been if she had been on full pay from all three employers, which is what you would expect.

As to not being repayable for people who do not complete tax returns, that is a bit like complaining to the policeman who stops you for speeding on the motorway that he didn't stop the BMW which just overtook you going much faster.

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By SE
28th Jan 2013 15:04

Fair is not a word I would use

Thanks Euan

Unfair would be the word I use. Fair would be for everyone to complete a tax return.

Perhaps the UK PLC cash flow would be a lot better that way

 

 

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By Ann Lovatt
29th Jan 2013 11:31

obligation to complete a tax return...........

.............sorry didn't clock the 3 employers bit in first statement.

If she wan't in SA system and knew she had under paid, isn't she obliged to inform HMRC as additional repayments due? Bit like being a higher rate tax payer from 3 different employers, if tax codes are incorrect???

I assume student loans will be treated same as any other tax?

I always call them a "gradute tax" not a loan anyway............just don't get me started on that soap box..........

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By Ann Lovatt
29th Jan 2013 11:37

Maternity pay........

.....thats another soap box...........as someone who is self employed I received zero maternity pay & only two weeks off work (& I was in hospital for a week of that) & had to complete our own weekly wages run & a VAT return while I was off too.............so sorry no sympathy here!

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