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contact@balloonaccounting.co.uk
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How do I deal with Student Loan Repayments ?

Student Loans are part of the Government’s financial support package for students in higher education in the UK.

They are available to help students meet their living costs while they are studying and there are two main types of student loan.

Fixed – term repayment loans (old – style loans).

These loans were available to students commencing a course of higher education up to and including the academic year 1997-98 and are often known as ‘fixed – term repayment’ or ‘mortgage – style’ loans. Repayments are made directly to the Student Loans Company (SLC).

Income – Contingent Loans (new – style loans).

These loans replaced the fixed – term repayment loans and became available to students commencing a course of higher education from the academic year 1998-99. It is HMRC’s responsibility to collect repayments where the borrower is working in the UK. The SLC is responsible for collecting the loans of borrowers outside the UK tax system.

There is an annual threshold below which repayments are not due. If the borrower’s income is above the threshold, repayments will be made according to the level of income.

There are two main types of loan known as ‘Plan 1’ and ‘Plan 2’.

Repayments are deducted at a rate of 9% of income over the threshold, although each plan has a different threshold.

In April 2019, a new loan for England and Wales known as Postgraduate Loan (PGL) was introduced.

There are separate thresholds and rates for these loans which are:

2017/18

Plan 1 – £17,775
Plan 2 – £21,000

2018/19

Plan 1 – £18,330
Plan 2 – £25,000

If you are employed then your employer will collect these sums and they will be reported on your P60. If you are self employed then you MUST tell me about the Student Loan and Plan so that I can calculate the liability. 

Please contact us for further information.

Disclaimer:  This App and its contents have been produced as a helpful reference point. The information should be used as a guide only and your specific circumstances are best discussed directly with us.

No reliance should be placed on this material and no action should be taken without seeking the appropriate professional or legal advice. Although the authors make reasonable efforts to ensure the content of this App is accurate and up-to-date, the authors make no representations, warranties or guarantees that the content is accurate, complete or up-to-date and accept no responsibility whatsoever for any loss occasioned by anyone acting on information within this App.

Categories: Employers, General
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