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Sir, please help a poor student….

15th Feb 2013
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Caller: “My client paid of his student loan during 2011/12 but the SA302 is showing the full annual amount due. “

The SA calculation shows a figure based on the annual earnings in the year as there is no box on the SA return to advise that the Student Loan has ceased. 

In a PAYE case the actual payments made can be entered in box 2 on page 2 of the main return and these will be deducted from the annual total but the balance will still be on the SA calculation even though it is no longer  due.

In a self-employed case the whole amount due for the year will appear.

As a result the amount calculated in SA is in excess of the payments actually made in the year.

If this happens the SLC will tell HMRC and the excess will be credited to your SA statement so that you only pay what you need to clear your account. 

At least that’s what the leaflet below says should happen!

http://www.hmrc.gov.uk/leaflets/csl1.pdf

Presumably in the meantime you are expected to make a claim to reduce for the relevant figure.

If you have experience of a case like this how long did it take for the SLC to notify HMRC and reduce the amount owed to nil? 

Click here to download a PDF of this tax tip

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Replies (4)

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By mmurray.moorsam.com
18th Feb 2013 12:12

We had a case along these lines and as far as we can see SLC did not inform HMRC, we had to do all the work.  Even though HMRC knew the data was incorrect, they would not make the necessary amendments until we chased each party that needed to pass data/paperwork etc.

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By mgh
18th Feb 2013 14:04

We also had a case like this

and it worked out fine, with SLC informing HMRC "in due course".

You can't make a claim to reduce (presumably because these can only apply to payments on account), but you can ask for the overpayment amount to be "informally stood over".

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By James26
18th Feb 2013 15:03

I had that myself...

... so I just increased the amount paid in the year to the SLC on the tax return to a round sum number above the amount that meant HMRC did not try to get more money (or in my case did not reduce the repayment!).  I then wrote a comment to say that the number put in was a plug because I had on file a letter from SLC saying that a repayment was due but their system was missing an option to cope with this.

I'd even delayed filing that year in the hope that the SLC (their letter dated early Dec) would have communicated this by end of January and HMRC would have updated their system.  The repayment came through without any adjustment for this item / not received comment to date.

I don't know whether you could refile the return to achieve the same effect?

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By Andrew Mann Keytime
27th Feb 2013 09:09

Thanks for your responses people.

I must say I am really surprised to here that this system doesn't really work very well.  It seems so well thought out and sensible......

(If anyone has a large pinch of salt they should take it now....)

 

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