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HMRC internal manual

Collection of Student Loans Manual

Compliance: borrowers compliance: calculating interest

Interest on unpaid SA student loan repayments runs from the SA balancing payment date. In a contract settlement, you should calculate interest using the guidance in the Enquiry Manual (EM) at EM6005 onwards, and EM4040 should mitigation of the interest be sought.

The SA student loan repayment due for a year is calculated without regard to the amount still outstanding on the loan. Where the repayments exceed the loan balance at the balancing payment date, the taxpayer is subsequently credited with the resulting over repayment and repayment supplement is payable from the balancing payment date for the year of assessment for which the over repayment arises.

In a contract settlement, S86 interest is charged on the full amount of the additional repayments included in the offer. When the loan interest is recalculated by the SLC and HMRC are notified of the resultant overpayments, these should carry repayment supplement from the relevant balancing payment date.

CSLM8560(This content has been withheld because of exemptions in the Freedom of Information Act 2000)