repaying student loan

[loosemarbles]

I am pretty much clear of my student loan with a small balance to pay off. As a lot of it has been cleared at short notice, HMRC won't register it will have been cleared when I (my accountant) Self Assess. The consequence will be that I will overpay massively, and it is likely to trip me into the higher tax bracket.

Is there anyway of paying the balance now, and HMRC knowing in advance for January's tax return, so it doesn't feature?

[ninja-lewis]

loosemarbles said:

I am pretty much clear of my student loan with a small balance to pay off. As a lot of it has been cleared at short notice, HMRC won't register it will have been cleared when I (my accountant) Self Assess. The consequence will be that I will overpay massively, and it is likely to trip me into the higher tax bracket.

Is there anyway of paying the balance now, and HMRC knowing in advance for January's tax return, so it doesn't feature?

Phone the Student Loans Company. It's possible to switch to direct debit/pay the remainder off so you can stop repaying through PAYE/SA. I'm not sure though if you then simply answer no to the student loan question on the SA form meaning HMRC don't take anything for this year.

[AyBee]

I can't help with the self assessment, but you can phone them at any point and flip yourself onto a direct debit for the remaining amounts so that they don't take more than they should, or pay off over the phone as a lump sum.

[Craikeybaby]

Be aware that you will need to have all your payslips/details of contributions for the current tax year, as the Student Loans Company don't get your payments when you pay them if you see what I mean. I Paid mine off direct at the start of the tax year, as they would have carried on making deductions on my PAYE, then refunded any overpayments - which in my case would have been more than the outstanding balance at the end of the year.

Whilst we are on the subject of stundent loans - my wife has about £4k outstanding on hers and is considering paying it off out of savings. I always thought it was better to have the savings and student loan, rather than paying it off (it will take a chunk out her savings to pay it off). What does PH suggest - pay it off now, or keep the money?

[Burgmeister]

I am in a very similar position. I 'switched' to paying by DD in January but because the SLC and HMRC are both terminally useless PAYE deductions continued alongside.

I allowed this to continue for a couple of months thinking it needed time to bed in. Then I cancelled the DD. Payments continue to be deducted through PAYE.

Anyway, I have now technically paid off the balance but PAYE deductions continue and each month I have to contact SLC to give me a refund - takes about three weeks to process.

They claim to be putting a stop to this but here we are. They rely on HMRC notifying my employer to stop the deduction and my employer claims not to be the incompetent party.

[loosemarbles]

Thanks All.

I have spoken to SLC, they were not much help!

DD isn't an option as I have only been paying a little amount for the past few months through PAYE so it isn't an option. Apparently if I self assess before 1st November, HMRC will re-calculate how much I owe in January, before I have to pay any tax. So, if I pay off the SL now, even though my initial self assessment will say that I need to pay 9% of other income, it won't actually end up that amount.

HMRC and SLC being government related, I am not filled with much hope mind! The hope I have, if I end up overpaying, is to be on it straight away with proof, but we will see.