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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Returns: individuals returns: student loan cases

Since April 2000, UK resident borrowers of income contingent Student Loans repay their loans through HMRC either

  • As a deduction from earnings together with tax and NIC

And / Or

  • Through Self Assessment

If the Student Loans Company record for a borrower matches a live SA record, the SL indicator is set on the SA record. The indicator can be viewed in function MAINTAIN RETURN SUMMARY.

For more information concerning the general rules for the Collection of Student Loans scheme, refer to the CSL Manual on the Intranet.

Completion of the SA return

A Self Assessment taxpayer, who is a borrower of an income contingent loan, is responsible for indicating on the Student Loan repayments section, page TR 5 on the SA100 Main return, or box 1.5 on the SA200 Short return, that they are liable to make Student Loan repayments.

Taxpayers liable to PAYE will have their repayments deducted by their employer. The total amount deducted should be entered in box 2 of the Student Loan repayments section page TR 5 SA100, or box 1.6 on the SA200. As Student Loan repayments are not deducted on a cumulative basis, taxpayers who have had more than one employment during the year will need to obtain the information from their payslips. Taxpayers who have remained in the same employment for the whole year can obtain the information from their P60, however we would advise them to cross check the amount with their payslips.

A self calculating taxpayer will need to calculate their Student Loan liability and enter the amount in box 3 of the Tax Calculation Summary page TCS 1 on the Main return.

In Revenue calculation cases the amount will be calculated by the computer in all cases where TR 5 box 1 (page 1 box 1.6) has been completed as ‘Yes’ and the income less certain deductions exceeds the annual threshold figure.

Unearned income is only taken into account in computing liability to Student Loan repayments if the total amount of unearned income exceeds £2000.

Return discrepancies

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Payment of CSL liability

When the SA return is captured any liability arising will be included in the balancing payment due.

The part of the balancing payment relating to Student Loan repayments will not be taken into account in calculating payments on account for the following year.

Borrower’s who are dealt with under PAYE would normally have regular deductions made by the employer. However additional liability may arise if

  • The taxpayer has more than one employment
  • Not all relevant earnings were taken into account by the employer
  • The borrower has other income, such as self employed profits or unearned income in excess of £2000

Student Loan Overpayments

Under the current legislation the amount of Student Loan repayment we can collect through a taxpayer’s self assessment is equal to 9 per cent of the eligible income above the threshold.

When an SA taxpayer is reaching the end of the repayment of the loan, they may contact you and complain that the amount outstanding on the loan is less than that requested in the SA calculation.

You must not attempt to amend the return to collect only the amount the taxpayer states is outstanding.

You should advise the taxpayer that the details of the amount included in the SA calculation will be sent to the Student Loans Company (SLC). If this amount exceeds the outstanding balance of the loan the SLC will arrange for a credit in respect of the excess to be made to the SA Statement of Account in due course.

Details of the Student Loan repayments collected through SA are not sent to the SLC until after 31 January following the year of the return. The taxpayer is also due to pay the SA liability by this date. If the taxpayer considers the amount of Student Loans repayment collected through SA to be excessive, they can make a request, which should be in writing, for an amount to be informally stood over.

Note: For further information regarding actions to acknowledge requests, to informally standover amounts, to deal with credits from the SLC and to amend informal standovers, see business area ‘Appeals / Postponements’, section ‘Postponements’, subject ‘Student Loan Overpayments’ (SAM11130).