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Student Loan Repayments

Student Loan Repayments

My client is employed under PAYE with no additional income outside of this employment.  He had the same employer throughout 2011/12.

The employer has deducted student loan repayments for part of the year, however, as my client paid off his student loan part way through 2011/12 and following the relevant notification from the Student Loans Company and in turn HMRC, the employer ceased deductions in October 2011.

We now come to complete the 2011/12 tax return and, quite correctly we have ticked the box showing that Student Loan Repayments are due and entered the employer deductions made from April - October. 

As there is no box to show that the loan was repaid part way through the year, the calculation is calculating the loan repayments based on full years income and therefore showing a balancing payment for my client to make.  This is clearly incorrect as the Student Loan was repaid in October 2011.

Is there anyway to avoid this balancing payment or is it a case that he must overpay and then reclaim from the Student Loans Company?  In this case my client had a significant bonus after October 2011 and the balancing payment to make is nearly £10,000 which, understandably he does not feel he should have to pay only to reclaim a few months (or possibly longer) later once the Student Loans Company have the information from HMRC!


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08th Jan 2013 14:28


You don't have to make the SL payment, though if you don't you get it in the neck from the SL people.

Pay the tax, plus whatever SL is due.  HMRC will have their money (they take the first cut) and the SL people shouldn't pursue.

We had a client in a similar situation, she called the student loan people and said she wasn't going to pay the January payment as she had already cleared the balance.  They were a little huffy, but they agreed to suspend collection while they checked her balance.

We also put something in the white space to say what was happening.

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