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SA - Final payment of Student Loan

awwallace22awwallace22 Feels At HomeRegistered Posts: 35
I have a client who is self employed and has a student loan.

Im doing the SA for 5/4/11 and the student loan calculated is £893 but the student loan balance as at 31/7/11 is £744 therefore an overpayment will be generated by £149.

Am I right in thinking that the student loan repayment calculated on the SA cannot be changed and that the student loan people will notify hmrc of the overpayment and the client SA account will be credited accordingly. If this is the case my client will have to wait till after 31/1/12 for a refund of the £149. The thing is my client does not want to pay hmrc the £893 but only what is due...should my client apply in writing to hmrc explaining that he/she only wants to pay the £744 balance or can something be done at the time of submitting the SA tax return 5/4/11?

What do you think?

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    I don't know the answer, but given we have loads of time to the filing deadline and payment date, I would get the return in, only pay the right amount in January, and contact the student loans company to get it straightened out before the payment is due,

    Alternatively, pay the student loan off now direct to them and don't tick the box on the tax return and disclose in the White space.

    I would contact the SLC to ask them as a first port of call.
  • qwertyqwerty Feels At Home Registered Posts: 82
    We had this situation for a client's 2010 Tax Return.

    The Student Loan Company will not tell HMRC how much to collect and therefore HMRC will want the full £893. They will pass this onto SLC who will send back to HMRC the overpayment and tell them no further amounts are due in respect of the Student Loan.

    This seems a bit of a round-the-houses way to do things, but I must admit SLC did sort it out rather promplty.

    Just ensure you explain to the client that it is out of your hands, our client thankfully understood.
  • payrollpropayrollpro Trusted Regular Hampshire/SurreyRegistered, Working Together with HMRC Posts: 418
    I agree with Qwerty, SLD's in SA are the same as in PAYE. It does not matter how much evidence you have that the amount owed is £744, to calculate and account for anything less than that generated by the standard calculation would earn your client a penalty.

    Yes it's bizarre and the AAT was one of those bodies which pleaded for the SLD system to be more dynamic but they went for the cheap option and that means paying what HMRC say and let the SLC refund the overpayment in their own time.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    payrollpro wrote: »
    I agree with Qwerty, SLD's in SA are the same as in PAYE. It does not matter how much evidence you have that the amount owed is £744, to calculate and account for anything less than that generated by the standard calculation would earn your client a penalty.

    Yes it's bizarre and the AAT was one of those bodies which pleaded for the SLD system to be more dynamic but they went for the cheap option and that means paying what HMRC say and let the SLC refund the overpayment in their own time.

    Thanks for the clarification. What a ridiculous set-up (though am not surprised!). At least with the due date being so far away there's (possibly) hope it will all come out in the wash in time :lol:
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