Have you ever wondered about repaying your student loan? Ensuring that your student loan is repaid is hugely important. However, it’s not always easy to know when you do and don’t have to repay these fees. Plus, with a new procedure in place for student loans, there’s definitely a lot to think about. Luckily, if this has left you feeling a little unsure, don’t panic; we’ve outlined the new process as follows to help.
A Common PAYE System Challenge for Student Loans
One of the biggest issues many people face when it comes to repaying their student loan is deductions being made even once the loan’s paid off. Indeed, this can be a major source of frustration for those on the PAYE system, understandably. After all, no one wants to pay more than they ought to be.
This is something that the HMRC has fortunately taken note of. As such, as of May 2024, changes have been announced to address this common concern. Notably, the Students Loan Company will now need to inform the HMRC when an ex-student has fully repaid their debt. This will allow the HMRC to inform the individual, who can then stop making deductions from their PAYE.
However, it is worth noting here that, depending on when notices are received, refunds may still be due for several months’ worth of pay. As such, it’s important to consider how delays may influence whether you’ve overpaid. Notably, such overpayments cannot be directly refunded through PAYE.
In addition to this, it’s also worth noting that refund delays have also come to light. Notably, while the SLC does refund overpayments, this usually doesn’t occur until the next tax year. Naturally, this can be a long time to wait for individuals who may need the money now. As such, it’s advisable to submit a refund claim with the SLC as soon as possible. This should help individuals affected gettheir money back more quickly.
What Should I Do if I Have Overpaid on my Student Loan?
Student loans repayment refunds are possible for several different reasons. These include the following scenarios:
- Your employer had you on the wrong repayment plan, thus causing you to overpay.
- You made repayments before you actually needed to.
- Your annual income was lower than the minimum repayment threshold.
- You’ve already paid back your total debt and have made extra payments.
Contact an Accountant for Professional Support
Student loan repayments through the PAYE system are generally very practical. However, while they can be a simple way to manage these payments, they also risk overpayments. As such, knowing how to address potential refunds is important. Fortunately, if you suspect you may have overpaid on your student loan repayments through PAYE, your local accountant can help.
Do you have any further questions about the changes HMRC has made to student loans with the PAYE system? If so, please don’t hesitate to contact us. We’ll be on hand to help find the right approach for you and your own taxes and loan repayments.